Sunday, August 28, 2005

RIL inches ahead


Reliance Industries edged higher in early trade on reports it may be close
to launching a multi-billion dollar bid for acquiring Innovene – the $
15-billion wholly owned subsidiary of British Petroleum. The stock was up
0.6% to Rs 702.70. Volatility was witnessed in the counter, as it moved
between positive and negative territory. 2.1 lakh shares changed hands in
the counter on BSE by the first few minutes of trade. The scrip witnessed a
solid surge during mid-July 2005 to early August 2005 on rumours that RIL
may announce a major overseas acquisition at its AGM on 3 August 2005.
However, the stock slipped on 3 August as no such announcement was made at
the AGM. The scrip lost 3.8% on 3 August 2005 to Rs 713.70 from a lifetime
closing high of Rs 741.95 on 2 August 2005. The stock lost further ground
later when correction gripped the bourses. Innovene makes olefins such as
benzene, butadiene, ethylene and polypropylene, and polymers. The bid could
exceed Rs 20,000 crore, which would be the biggest attempt by an Indian
company for a global acquisition. The bid could put RIL among the world's
top five petrochemical companies, from 10th now. RIL is also believed to be
interested in a Canadian company called Nova Chemicals. Nova Chemicals has a
joint venture with Innovene to make styrenes in Europe. It may be recalled
that Mukesh Ambani, Chairman and Managing Director, RIL said at the
company's AGM on 3 August that RIL has enough surpluses for new acquisitions
and new initiatives.

RIL may advance on rumours it is eyeing a major global acquisition


Reliance Industries (RIL) may edge higher on reports it may be close to
launching a multi-billion dollar bid for acquiring Innovene – the $
15-billion wholly owned subsidiary of British Petroleum. Innovene makes
olefins such as benzene, butadiene, ethylene and polypropylene and polymers.
The bid could exceed Rs 20,000 crore which would be the biggest attempt by
an Indian company for a global acquisition. The bid could put RIL among the
world's top five petrochemical companies, from 10th now. The market has
been rife with rumours for some time now that a mega deal involving RIL is
in the offing. RIL is also believed to be interested in a Canadian company
called Nova Chemicals. Nova Chemicals has a joint venture with Innovene to
make styrenes in Europe. Great Eastern (GE) Shipping may see action after
the company informed BSE on Saturday (27 August 2005) that its board will
meet on 31 August 2005 to consider proposals for restructuring of its
business. Although no details were available, as per market talks the
largest private sector shipping company might be considering spinning off
the offshore business into a separate company. The offshore business
constituted 12% of GE Shipping’s revenue and 9% of net profit in the
financial year ended March 2005.
Shares of MNC affiliates may see action on expectations that the MNCs may go
for delisting of their Indian affiliates following Sebi’s diktat that listed
companies should raise their non-promoter holding to a minimum 25% within
two years. Companies with parent’s holding 75% or more are most likely to go
for delisting. This includes companies such as Gillette India, AstraZeneca
Pharma, Wartsila India, Whirlpool of India and Saint-Gobain Sekurit. Media
major Zee Telefilms may see action after the company said its board has
approved transfer of the company’s business relating to broadcasting of news
and current affairs content to Zee News. This has been done with a view to
comply with the requirements of guidelines of news and current affairs
channels, issued by Ministry of Information and Broadcasting, Government of
India, it said.
Jet Airways may edge higher after NSE decided to add the stock in the S&P
CNX Nifty index in place of Colgate. The change will be effective from 26
September 2005. Sterling Tools may rally after the company’s board approved
a liberal 1:1 bonus. Wim Plast may edge higher after the company said the
commercial production at its Baddi, Himachal Pradesh (HP) unit commenced
from 19 August 2005. Stelco Strips may edge higher after the company said it
has approved allotment of shares on a preferential basis to promoter group
and non-promoter group at a price of Rs 31 or at such price as may be
determined in accordance with prevailent SEBI Guidelines whichever is
higher. The stock settled at Rs 29.10 on BSE on Friday 26 August 2005.
United Western Bank may see action after the bank’s board recommended a 1:5
bonus and a 1:2 rights issue on post bonus holding at a price of Rs 24. The
stock settled at Rs 71.85 on Friday, 26 August 2005. Morepen Laboratories
may edge higher after the company has announced 52 DMF filings across ten
European countries for six products.
Cadila Healthcare may edge higher after the company said its board has in
principle approved an investment in equity up to Rs 40 core in an European
biotech company.

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