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Reliance Industries is trading higher by nearly 3% at Rs 878 in early morning deals on the BSE, after the Cabinet Committee on Economic Affairs (CCEA) allowed the company to double the price of gas produced from its KG-D6 block to $8.4 a million British thermal unit (mBtu) from April 1, 2014.
However, the breather is subject to certain riders — the company has to give a bank guarantee for shortfall in production from the block and sign a supplementary agreement with the government for the new dispensation, the Business Standard newspaper report suggests.
The bank guarantee, which will be equivalent to the incremental revenue that Reliance Industries will get from the new gas price and it will be encashed if it is proved that the company hoarded gas or deliberately suppressed production at the main gas fields Dhirubhai-1 and 3 (D1&D3) fields in the eastern offshore KG-D6 block since 2010-11.
Analyst at Angel Broking maintains Accumulate rating on the stock with a target price of Rs 931.
However, the breather is subject to certain riders — the company has to give a bank guarantee for shortfall in production from the block and sign a supplementary agreement with the government for the new dispensation, the Business Standard newspaper report suggests.
The bank guarantee, which will be equivalent to the incremental revenue that Reliance Industries will get from the new gas price and it will be encashed if it is proved that the company hoarded gas or deliberately suppressed production at the main gas fields Dhirubhai-1 and 3 (D1&D3) fields in the eastern offshore KG-D6 block since 2010-11.
Analyst at Angel Broking maintains Accumulate rating on the stock with a target price of Rs 931.
