RIL is unlikely to report USD 9/bbl GRM in Q4: SP Tulsian

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RIL is unlikely to report USD 9/bbl GRM in Q4: SP Tulsian

In an interview with CNBC-TV18, SP Tulsian of sptulsian.com, spoke about his outlook for Reliance Industries (RIL).

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Q: What do you make of the talks since yesterday that we are reporting that of those shale gas acquisitions?

A: Honestly I have no idea on that. However, ultimately they have to look for the acquisition to the extent of USD 2-4 billion and if they are going for those kinds of acquisitions especially in ENP and in petrochemicals, I will view them as a quite positive for the stock.

Q: The overhang seems to be that RIL every time it makes a move and gets to 1100 that there is talk of treasury stock sale again. Do you think its likely if RIL continues its current move?

A: I see cleaning up of the balance sheet to a great extent by the company on or before March 31. For the first time we would be seeing a reduction in the equity which looks very strange for a Chartered Accountant if he goes through. This time we are going to see that happening even on a stand alone and consolidated basis because in FY09 balance sheet, they have shown in the consolidated accounts getting the equity reduced to the extent of the treasury stocks held by the company.

There are multiple events for the stocks to rise because we have seen sudden reports coming in. I am not saying that those are independent reports, but certainly you see five-six broking houses, they come out with positive report on RIL in these last two-four days. I will see that as a step in the direction to offload maybe some chunk to the extent of about USD 1 billion of treasury stocks by the company maybe on or before March 31. Eventually they are all looking for a level of about Rs 1100 per share because earlier the sale of treasury stock has happened at around 2200 when it was cum bonus. Obviously they will not be interesting in selling this time below this, otherwise the earlier acquirer will feel not disappointed.

Therefore, this could just be a step in that direction that next tranche may happen on or before March 31 maybe to the extent of USD 500-600 million, but I won't be surprised if it goes to USD 1 billion also.