Reliance Natural Resources Ltd (RNRL) witnessed a fall of 27.3 per cent — the biggest intra-day fall in its listing history of more than four years — on Monday after the company announced the merger of RNRL with Reliance Power in the swap ratio of one share of Reliance Power for four shares of RNRL.
The shares of RNRL fell by 17.4 points or 27 per cent to close at Rs 46.3 per share (market cap of Rs 7,561 crore) while the shares of Reliance Power rose by 3.6 per cent during the day to close at Rs 181.4 per share (market cap of Rs 43,477 crore).
Experts feel the swap ratio of the deal is not in favour of RNRL shareholders and that has dampened their sentiments.
“The market expected a swap ratio of 2:1,” said Ajay Parmar, head of research, Emkay Share and Stock Brokers. “Also the government policy seems to be that the fuel can be sold to the actual user and hence there is not much value for the intermediate company (RNRL).”
Others feel there was a speculative element in the share prices of RNRL on account of the legal battle on the gas pricing issue.
“Once that was lost there was not much left in the company in terms of valuation and after the merger ratio of 4:1 the shares further lost their charm,” said another broker who did not wish to be named.
While RNRL lost, RPL gained and was up by 8.4 per cent during the day before closing with a gain of 3.6 per cent as experts feel that the deal favours RPL and RNRL’s merger is a booster for the power major.