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| Edited By: Sreejiraj Eluvangal,Sachin P Mampatta |Source: DNA |Updated: Mar 17, 2018, 02:27 AM IST
After having raised over a billion dollars through sale of treasury stock already, Reliance Industries (RIL) is in the market to unload more.
Investment bankers Citigroup and Morgan Stanley have reportedly approached large institutions for a further stake sale of close to Rs 2,800 crore, market sources said.
“We have got feelers since the day the Life Insurance Corporation (LIC) deal was announced,” said an official with a prominent asset management company, who did not wish to be named.
According to sources, RIL wants valuation “close to the market price” for the next tranche.
RIL sold 1.50 crore shares on September 17, 2009 and 2.59 crore shares on January 4, mopping up Rs 5,868 crores.
Source said RIL is finding it difficult to get buyers for its chunk of shares at market prices, primarily because many investors are waiting for the verdict from the Supreme Court on its fight with the Anil Dhirubhai Ambani Group over gas rights.
An unfavorable verdict can dent RIL’s profits from the KG D6 gas by tens of thousands of crores over the next few years.
While RIL did not comment on the matter, sources in the know said the company may sell as much stake in the market as it sold to LIC two days ago.
On Monday, RIL had raised Rs 2,680 crore by selling 2.59 crore treasury-stock shares, mostly to the Life Insurance Corporation.
The shares had been sold at Rs 1,035 each, a discount of around 5% to the market price.
Nilesh Banerjee and Nishant Baranwal, analysts with Goldman Sachs, on Tuesday said they do not rule out additional sale of treasury stock in coming months if RIL decides against raising fresh debt to fund potential acquisitions.
“This could be an overhang on the stock performance in the near term, in our view,” they wrote in a note on Tuesday.
An RIL spokesperson refused to respond to an email query from DNA.
RIl has not yet commented on the reason for its frenetic fund raising, but some market participants believe it could be to fund a possible acquisition of the bankrupt petrochemical company Lyondellbasell.
RIL has submitted a preliminary non-binding bid for the company, but is yet to carry out a detailed analysis of the company’s assets and liabilities, partly because of a frosty reception from the current Lyondell management.
Others, however, dispute the view that the fund raising is being done for acquiring Lyondellbasell, primarily because of the time required to close such a deal.
The court, for example, will only start hearing petitions by Lyondell’s unsecured creditors against its current rescue plan in February.
In all, any deal is at least six months away from actual downpayment. RIL also has around $5 billion in cash which it can use to fund any initial expenses if the path for a takeover becomes clear.
