RIL spurts on share issue buzz

The Reliance Industries scrip was on fire on the Bombay Stock Exchange today as the market was abuzz with talks that shareholders of the company would get shares in Reliance Energy, Reliance Capital, Indian Petrochemicals Corporation and the unlisted Reliance Infocomm as a part of the division of the group business between the Ambani brothers.

When contacted, a Reliance Industries spokesman said the group would not like to comment on speculation as a matter of policy.

Market players, however, seemed to be confident that such an arrangement was being worked out and an announcement on the issue of shares in group companies could be made either at or after the RIL shareholders' meet scheduled for August 3.

Reliance Industries holds 47.20 per cent stake in Reliance Capital, 6.54 per cent in Reliance Energy and 46 per cent in Indian Petrochemicals.

In intra-day trades, the Reliance Industries stock reached Rs 669.65 from the opening level of Rs 642.10 and finally closed at Rs 666.60. Reliance Capital went up to Rs 404.90 against the opening of Rs 398.95; the Reliance Energy stock reached the day's high of Rs 635.90 after opening at Rs 621.40 and the IPCL stock went up to Rs 189.75 after opening at Rs 184.90.

All the counters, however, lost some momentum towards the end of the trading sessions. Reliance Energy closed at Rs 632.95, Reliance Capital at Rs 399.10 and Indian Petrochemicals at Rs 186.60.

Industry sources said Reliance Industries could follow the model followed by Larsen & Toubro. Shareholders of L&T got shares of UltraTech, the company that was formed after demerging the cement business.

Throughout the day, cellphone messages were doing the rounds in the bourses on the share allocation formula.

According to this, for every RIL share held, there will be an issue of 0.33 share in Infocomm, 0.33 share in IPCL, 0.22 share in Reliance Capital and 0.12 share in Reliance Energy.