Archive for January, 2013

Mukesh Ambani Speaks About A Connected World At WEF

January 28, 2013

Today, staying connected and reaching out to the word, is of paramount importance. Reliance Industries Limited (RIL), the country’s largest conglomerate that has made its presence felt globally, successfully tapping opportunities across the world and associated with a number of international companies, wants everybody to have a similar approach.

Manifesting the company’s alliance to WEF network of young achievers –the Global Shapers Community, Mukesh Ambani, India’s most powerful business magnate in his speech, spoke about the changing world and the high need to stay connected. About the transition phase, he mentioned that the world would be a close- knit community where around seven billion will be connected, completely in contrast to a scenario where no one was connected, some years back. He also said that he was excited to be associated with this initiative not only in India but also across the world.

Reliance Industries is associated with the Global Shapers Community, one of the multi- stakeholder communities at the World Economic Forum, a network of city-based hubs by young individuals who are passionate about bringing a change in the society. They exist in around 205 cities and have around 1700 young leaders below the age of 30. Speaking about it in the ‘Meeting Million expectations,’ he mentioned that Global Shapers Community is special to him and others at Reliance who believes that this could highly benefit a country like India that has a huge young population. He also believes that with support from companies like Reliance and Coco- Cola, the initiative will garner huge popularity and could bring in tremendous change, especially in developing countries.

Mukesh Ambani was elected as the Member of Board on World Economic Forum on August 27, 2010. The foundation board has veterans from fields including politics, business, academia, and civil society, resonating with the mission to introduce a better state of the world, and can contribute immensely to make the agenda come true. In the year 2011, he, in his speech, called India a land of billion opportunities and not problems , and mentioned that the government must increase its pace to match up to the private sector.

Meghann Gunderman, Executive Director, The Foundation For Tomorrow, USA, that works to provide accommodation and education to orphans in Africa, presented the Economic Forum, this time.

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Banking On Buyback Turns Out To Be Beneficial For RIL

January 17, 2013

RIL (Reliance Industries Limited), India’s largest private sector conglomerate by market value, has come to the fore with its buyback program wherein it makes an effort to add value to its stockholders. Besides stabilizing the company’s stock price, this buyback program will also benefit shareholders owing to value addition. TheMukeshAmbani led company has bought back shares amounting to around Rs, 4.6crores.

Prime database, an esteemed source of information for fundraising,buybacks, and open offers claims this buyback at Rs.3366croreto be the largest ever in India, valued to be around 78% of the total funds infused in the 13-buyback offers in the country, last year.The year 2013 had 13 companies shelling out Rs. 4,300 crore for buybacks, in all. Buyback offer of United Phosphorous accounting to over Rs. 288crore and Indiabulls Real Estate’s worth Rs. 273 crores have been the second and the third biggest ones in the entire year, after RIL.

Buyback has had positive repercussions wherein the stock price has climbed by 16% to Rs. 860 at present. RIL’s market capitalization also rose by Rs.44, 000crore that is estimated to be Rs. 2.78 lakh crore.

The buyback opened on 1 February 2012. Out of the conglomerate’s total planned outlay that accounted to Rs. 10,440 crore, it expended 32% of the same to buyback shares worth Rs.4.6 crore shares, with the average price ascertained as Rss.727.

Speaking about this addition in RIL’s buyback policy, a Mumbai based analyst claimed that the buyback program has safeguarded the company’s shareholders at a crucial period when the fall in the market would have left the retail shareholders dejected.

Analysts also believe thatRIL’s buyback could further get aggressive with it ending on January 19. Egging on the scheme in order to back the share price, investors are known to bet on the company to continue it for a year. However, the decision will come to light only after the Rs.10,000crore buyback plan closes and the meeting is held to discuss the third quarter results. Research Head of CNI, KishorOstwal had earlier claimed that the value gained due to buybacks may depend on key factors including the readiness to buy proposed shares and premium sustainability.

The company is also optimistic about its profits considering the chances of an increase in higher gas price as recommended by the Rangarajan Committee. It also got a go- ahead from the Oil Minister,VeerappaMoily to drill an exploration well in the producing fields. However, the deal is subjected to a number of terms and conditions.

RIL May Be the Largest Beneficiary Of The New Natural Gas Pricing Policy, Seeks To Work On New Fields

January 9, 2013

With the Government toying with the idea of increasing the price of natural gas, RIL (Reliance Industries Limited) is poised to capitalize on a 15% profit margin, from its fuels in the newer fields at the KGD6. This change of policy from the government wherein it allows a two- fold increase in price could serve to boon for the company with it being the country’s largest energy giant.

The discussion came to the fore at the Rangarajan‘s panel that advocated a mechanism where the domestic pricing of natural gas will comply with the international principle. Putting into effect this policy will surge the present price to $ 8 as per the Emkay Global Financial Services Ltd, brokerage firm. This will give room for natural gas producers to earn profit, unlike the present scenario where it has been extremely demanding for them.

This decision will have a huge role to play in the conglomerate’s future growth, considering its colossal reserves of untapped natural gas. At present, the company sells gas from the KGD6 basin at $ 4.20 as per the current policy while it requires a minimum of $ 7 to break even with respect to the new wells. However, with the change in policy, it will be able to sell it at $ 8 per million British Thermal Units and will be in a position to gain a profit margin of around 15%. The price set by the government has hence proved to be a huge detriment to the company’s growth and production, making it strenuous for it to erode supplies and engage in the pricey exports.

The Rangarajan report has already cheered the market wherein Mukesh Ambani led RIL’s shares have mounted by 5.5%. M. Veerappa Moily, Oil Minister has notified about his ministry examining the report and weighing the consequences of implementing it, at present. Analysts including Mumbai based Emkay and Jagdish Meghnani claimed that Reliance would be the largest beneficiary with the price hike.

The report pegs on a policy that entails price and production linked bidding and revenue sharing with the government, opposing the present one that depends on cost recovery and suggests that one price be calculated from the volume weighted net-back price to the producers at the well-head of the exporting country for Indian import. It sets a 12-month average for the same. Another mechanism, according to it, would be adhering to the volume-weighted price of US’s Henry Club, UK’s NBP and Japan custom cleared ones.

RIL had earlier opposed uniform marketing margin claiming it to ungrounded and unfeasible, considering the differences involved in the associated costs and risks for every entity.