The Securities and Exchange Board of India's decision to hike the threshold limit for making open offers to 15 per cent from 10 per cent and increase the creeping acquisition limit to 5 per cent has opened up interesting possibilities for Reliance's investments in Larsen & Toubro and BSES.
Sources said the company may soon increase its holding to 15 per cent, the new limit for making open offers.
Reliance Industries will, therefore, be able to consolidate itself further in L&T and BSES where its holding is around 7 per cent. Further buying may push up the market prices of both these companies.
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Reliance will also benefit from the Prime Minister's announcement on Saturday that government permission for inter-corporate investments is no longer required.
Under section 372 of the Companies Act, a company needs department of company affairs' permission for investing more than 30 per cent in the equity of another company. Such permissions usually take a long time. The removal of this hurdle makes it easier for Reliance to increase its stake in both the companies.
Meanwhile, Reliance Industries may soon announce its buyback programme. Sources said Reliance has been ready for quite some time and is just waiting for the Ordinance to be issued.
The exact amount to be bought back is not known. Sources said the Reliance market price at Rs 107 is likely to rise to around Rs 130 in the coming few days. In kerb deals on Saturday and Sunday, the price was quoting at Rs 112.