Reliance Industries shares opened at Rs 823, and soon surged nearly 1% on Thursday morning after the company announced yesterday that it has acquired assets of Kemrock Industries for an undisclosed amount.
Reliance Industries shares opened at Rs 823, and soon surged nearly 1% to hit all time high of Rs 832.7, as the shares turned ex-bonus today, after the company announced yesterday that it has acquired assets of Kemrock Industries and Exports Ltd for undisclosed sum to enter the composites and carbon fibre manufacturing business. The move fructifies Reliance Industries’ efforts to enter the composites business and establish a leadership position in this large and growing market in India, it said. Composites are used in a variety of applications and industries such as renewable energy, mass transportation, infrastructure and a host of other industrial products.
“Reliance Industries Ltd participated in an online e-bidding process held recently by Allahabad Bank being leader of the consortium of 11 Banks to sell / dispose off assets of “Kemrock Industries & Exports Limited” of Vadodara (Gujarat) and has been declared as the winner in the said bid,” the Mukesh Ambani-controlled diversified conglomerate said in a statement yesterday.
Reliance Industries shares have returned 52% in the year so far. In comparison the Sensex has returned just 18% since January. Shares of Reliance Industries have risen more than 7% since it announced better-than-expected June quarter earnings in July. In comparison, the Nifty 50 index has moved up 0.4% during the same period.
Kemrock Industries, whose shares have been suspended since at least March of this year, has a market capitalisation of Rs 17.75 crore. However, notwithstanding its financial troubles, Kemrock Industries and Exports Ltd is usually counted among the leading players in the carbon fibre wraps market with presence in regions including North America, the United States and Europe. Kemrock Industries is one of the loan defaulters which has been pushed into bankruptcy by its lead banker Allahabad Bank for failing to repay as much as Rs 444 crore in loans.
Reliance Industries said that the acquisition of Kemrock Industries’ assets will pave the way for it to foray into new materials (composites and carbon fibre) and further strengthen its petrochemicals business portfolio. RIL is in the process of complying with the necessary formalities for acquisition of assets, it said yesterday.