Tips to trade RIL, RPL today

Published on Fri, Feb 27, 2009 at 18:30 |  Source : CNBC-TV18

Updated at Mon, Mar 02, 2009 at 08:17  

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Tips to trade RIL, RPL today

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Reliance Petroleum |

The Reliance Industries board will meet on March 2 to consider merger with Reliance Petroleum. The merger is effective retrospectively from April 1, 2001.

 

RIL, India's largest private sector enterprise, will issue about 34-crore additional equity shares of market value of approximately Rs 11,000 crore. RIL sold 4% stake in RPL taking its stake down to 71%.

 

Reacting to the RIL-RPL merger news, Dipan Mehta, Member, Bombay Stock Exchange, said this is what the company management has been doing over the years. "Forming separate companies and then merging them."

 

Mehta further said that net-net it really makes no difference for the performance of either of the companies. "But I think they will create a feel good effect in both the stocks," he added. "In times like this, even a bit of positive news would help."

 

(Also read: RIL to consider merger with RPL on March 2 )

 

Here is a verbatim transcript of the exclusive interview with Dipan Mehta on CNBC-TV18. Also watch the accompanying video.

 

Q: What do you expect is going to be the reception of this news on Monday? How do you expect the two shares to move?

 

A: I think the whole controversy about or rather analysis about the exchange ratio would start. This is what the company management has been doing over the years forming separate companies and then merging with them. Net-net makes really no difference for the performance of either of the companies.

 

However, I think they will create a feel good effect in both the stocks. In times like this even a little bit of positive news would help. I think by and large it would just create a positive sentiment for both the stocks. Operationally, RPL stands to gain more but then we have to understand exactly how they are going to adjust the ratio and net-net what the shareholders are going to get in RPL.

 

Continued on page 2...

  

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