Date:19/01/2006 URL: http://www.thehindubusinessline.com/2006/01/19/stories/2006011902730100.htm

Back Demerged RIL share valued at Rs 714 in special trading session

Our Bureau

Mumbai , Jan. 18

THE Reliance Industries Ltd stock closed at Rs 713.93 at the special trading session held today to discover its price after the demerger of its telecom, finance and energy businesses. The price is 23.07 per cent lower from Tuesday's close of Rs 928.15, when RIL was an undivided entity.

On the BSE, the RIL stock opened at Rs 702 and touched an intra-session high of Rs 727.75, before closing at Rs 713.95 at the special one-hour exclusive trading session between 8.00 a.m. and 9.00 a.m.

Following the stripping of the telecom, energy and finance assets, the RIL's market capitalisation has been reduced by Rs 32,719.52 crore or 25 per cent, from Tuesday's market capitalisation of Rs 1,29,387.22 crore. This leaves RIL's current market cap at Rs 96,667.70 crore.

RIL's weightage in NSE's Nifty index now stands at 7.39 per cent, down from 9.60 per cent. Against this, ONGC's present weightage stands at 13.02 per cent on the Nifty, up from 12.95 per cent earlier. The special trading session was held to adjust the weightage of RIL on the indices, after adjusting for the de-merger.

According to Mr Sashi Bhushan, Head (Western region) of IL&FS Investsmart, the RIL stocks' new valuation was in line with the market expectation of Rs 700-levels. "RIL has got a decent valuation and I expect some selling to happen at around Rs 720 levels," Mr Bhushan said.

During the normal trading session — on the first day of trading after the de-merger — the stock lost another Rs 20.10 to close at at Rs 693.85.

Over six crore shares were traded at the counter on the BSE and NSE during the day.

Dealers said they expected the RIL stock to see a good upside from the present levels over a one-year period. "We see a good upside from these levels," said Mr Ketan Dedhia, Managing Director of Nalanda Securities.

In a statement issued today, Mr Anil Ambani was quoted as saying RIL's stand-alone post-demerger market capitalisation is 15 per cent higher than its pre-demerger market capitalisation, and 23 lakh Reliance shareholders will further benefit from the free shares they receive in the four Reliance Anil Dhirubhai Ambani group companies, namely, Reliance Communications Ventures Ltd, Reliance Energy Ventures Ltd, Reliance Natural Resources Ltd and Reliance Capital Ventures Ltd."

Meanwhile, the NSE, in a press release, said the trading activity was normal at the special one-hour session with 3.98 crore shares of RIL being traded. After the close of the special session, the weighted average price of RIL was Rs 714.35. NSE said the adjustment of the base index value was suitably carried out to compute the index value so as to effect the demerger of RIL.

Hitch in trading: However, once the first trade in Reliance Industries was executed, it was observed that the Nifty index reflected incorrect value. It was found that due to memory initialisation failure, the last traded price being reckoned for index computation purpose was carrying an incorrect value. This resulted in a wrong Nifty index value being displayed. The problem was identified and changes were carried out to reflect the correct value. This led to the Nifty index dissemination getting stopped for 26 minutes, from 10.30 a.m. to 10.56 a.m.