Reliance gets Rs 2,675 crore new year gift from LIC
The first trading day of 2010 saw India’s largest institutional investor, the Life Insurance Corporation of India (LIC), invest Rs 2,675 crore in the country’s largest private sector company, Reliance Industries Ltd (RIL).business Updated: Jan 05, 2010 00:32 IST
The first trading day of 2010 saw the country’s largest institutional investor Life Insurance Corporation of India invest Rs 2,675 crore in the growth story of India’s largest private sector company Reliance Industries Ltd (RIL).
LIC bought 2.58 crore shares to take up its holding from 6.04 per cent to 6.8 per cent.
The shares were sold by Petroleum Trust — a promoter of RIL — that held 5.46 per cent stake in the company on September 2009. The beneficiary is Reliance Industrial Investments & Holdings, a wholly owned subsidiary of RIL.
“The trust will realise approximately Rs 2,675 crore at an average price of Rs 1,035 per share,” RIL said. This is a discount of 5 per cent on its Thursday closing price of Rs 1,089.
“We purchased the shares keeping in mind the growth prospects of the company and because valuation looks attractive,” said Mohan Raj, executive director (investments), LIC.
This is the second time in four months that RIL has sold shares. In September 2009, Petroleum Trust sold 1.5 crore shares of RIL to raise Rs 3,188 crore, taking the total capital raised to Rs 5,863 crore.
Experts link the sale to some foreign acquisition the firm is eyeing. “The share sale is probably to fund some major acquisition that will boost the company’s future growth potential,” said Alex Mathews, head of research, Geojit Securities. RIL has been in talks to buy The Netherlands-based Lyondellbasell.
Its share price fell 1.4 per cent to close at 1,075. “The correction was on account of shares being offered at discount to LIC,” Mathews said.