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India’s biggest stock buyback by Reliance

Mumbai, July 17 () : Touted as Indian stock market’s biggest buyback so far, the Reliance Industries Ltd. (RIL) led by Mukesh Ambani has bought back 35.1 million shares, worth Rs 2,512 crore, from its public shareholders.

This move came after the shares started sliding to below Rs 720. Between February 14 and July 13 , RIL has bought one-fourth of the announced buyback of 120 million shares.

SEBI norms allow companies to buy 10% of the public shares within one year after the board passes a resolution to this effect. On January 20, RIL board announced the Rs 10,440-crore buyback plan, its first and biggest in seven years. The fund managers for the buyback are Citigroup Global Markets and DSP Merrill Lynch.

The RIL stock is at present trading around 720 level, which is much below the maximum price of Rs 870 per share offered by the company for the buyback. After completing one-fourth of the buyback, RIL closed at Rs 720.3, only marginally up on BSE on Monday.

The impact of the buyback would not have any positive impact on RIL stocks, says brokers. The biggest buyback after 2005, RIL’s exploration and production business is not looking good. Performance for this quarter is also going to be average and muted. With the kind of cash reserves RIL is sitting on, it needs to address its performance which has been average, feels analysts.

In a filing before BSE today, RIL said that the Board of Directors of the company will meet on July 20, 2012, to approve the unaudited financial results for the quarter ended June 30, 2012 .

Reliance Industries conducted a road-show in Singapore to raise $1.5-billion (Rs 8,300 crore) foreign loans for expansion of its Jamnagar petrochemicals facility, sources said. This is the third time RIL is fund-raising since February. It gross debt rises to $15.4 billion or over Rs 85,000 crore.

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