Financial Daily from THE HINDU group of publications
Tuesday, Jul 09, 2002
Reliance group stocks end firm
MUMBAI, July 8
THE share prices of Reliance companies showed a modest recovery on the bourses on Monday, notwithstanding the demise of the group's founder.
The four listed companies in the Reliance fold gained between 3 per cent and 4 per cent each. RIL gained 3.08 per cent on BSE, ending the trading day at Rs 271.40; RPL was up 3.39 per cent, closing at Rs 24.40; Reliance Capital, at Rs. 56.85, gained 3.93 per cent; and Reliance Industrial Infrastructure gained 3.77 per cent, closing at Rs. 35.80.
In fact, RIL and RPL were the major gainers among the constituents of BSE Sensex.
Over the last 10 days the market had discounted the impact that the demise of the Reliance founder would have caused, dealers said. Most of the bad news had already been absorbed by the market, they said.
At the news of the hospitalisation of Dhirubhai Ambani, the share price of the four companies had fallen, only to stabilise a few days later.
There had been some concern in the market that the share prices of the Reliance group companies might fall further. However, most of the market players and fund managers were confident that the business would be `as usual' for the petrochemical giant. The view in the market is that the petrochemical cycle is on upward swing, and that at these levels, the sector stocks seem undervalued.
In addition, analysts have also started looking at the strategic advantages the group is to have after the acquisition of 26 per cent stake in IPCL.
`The benefits of this acquisition would show in the next few quarters. With the uptrend in the petrochemical cycle, the stock looks attractively priced," said an analyst with a foreign broking firm.
Market players said the group's shares were likely to remain firm over the next few months.
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