The boards of Reliance Industries (RIL) and Reliance Petroleum (RPL) will meet on Monday to consider a merger of the two companies, which will create one of the world’s biggest privately-held petroleum companies.
RIL and RPL boards are expected to announce a share swap ratio. If the merger is approved by the boards, the market capitalisation of the combined entity will be Rs 2,33,000 crore at Friday’s closing price on the BSE. RIL’s market cap now is Rs 1,99,093 crore.
This will be the second merger between RIL and RPL. RPL had merged with RIL in 2002 to consolidate its operations. However, in 2006, RPL was listed on the bourses as a separate entity after an initial public offering (IPO), which helped it raise over Rs 8,100 crore. The merger, according to analysts, will allow RIL to use additional cash flows generated by RPL, which can be used to step up investment and expansion of its oil and gas exploration business. RIL reported a 56.67 per cent dip in its net profit to Rs 3,501 crore for the third quarter of the current financial year due to volatility in prices and margins.
