RIL stock up 100% since price discovery a year ago

Mumbai, Jan 22 | Updated: Jan 23 2007, 05:30am hrs
It is a little over a year since the Bombay Stock Exchange held a special trading session to discover the stock price of Reliance Industries Ltd (RIL) in a de-merged form. One year along, the companys stock price has gained nearly 100%.

At the special trading session on January 18, 2006, RIL had ended at Rs 693.85. Since then, the stock made remarkable progress, moving to a life-time high of Rs 1,409 on January 19, 2007. On Monday, RIL closed at Rs 1,373.45 on the BSE.

When the initial reports of the de-merger of RIL Indias largest private sector entity surfaced in June 2005, investors were seen offloading their stakes in the company, signalling a loss of confidence.

However, there were still a large number of shareholders who remained with the company. More importantly, market experts say the upswing has just begun and there is plenty of room for appreciation.

SP Tulsian, investment consultant, said, The de-merged price was discovered a year ago, and if all the de-merged entities are taken into consideration, then the gain in the stock price has been more than 100%. But, I expect a further growth of 18-20% in the RIL stock price from the current levels within 2006-07. There is no dearth of triggers. Reliance Retail has planned a massive rollout. On the refinery side, even if the gross refining margin is maintained at $10/bbl, from the current US$ 11.7/bbl, I see no cause for worry. There have been reports of the company mulling hiving off its K-G basin assets to accommodate foreign partners and I am sure there are many foreign partners ready to come on board.

On the other hand, Reliance Communications Ltd (RCoM), after its de-merger from the parent company,RIL, has also registered significant gains. RComm was listed on the stock exchange on March 6, 2006 at Rs 290 and closed the day at Rs 290.85. RComm has gained 54% in almost 9 months, closing at Rs 447.45 on Thursday.