RELIANCE raises Rs 3,188 crore from treasury stock sale
On Sept 10 2009 RELIANCE IND sold up to 210,000 tonnes of gasoline for October 2009-March 2010 lifting to Western trader Trafigura at a premium of 80 cents to Singapore's spot quotes on a free-on-board (FOB) basis. http://in.reuters.com/
Why did Reliance do both deal within short span and why are analyst who are familiar with RIL worried?
There have been many instances where RIL has set bench mark and most of the top and bottom has been formed after few actions taken by this company.
http://www.domain-b.com/
Monthly Graph of RPL from listing till date and November2007 has seen highest ever price and volume.
The forward contracts for crude oil were placed by a Dubai-based company which handles this part of RIL’s business. The company had booked at least three contracts at $120 a barrel, $100 a barrel and $80 a barrel, respectively, in the middle of 2008, an oil industry analyst said.
http://economictimes.
On 22nd January 2009 In evening(6.P.M) after RIL announced results below mail was send to my mailing list:
Reliance announces result Rs.3501crs profit for the 3rd quarter which is above market estimate with GRM (Gross refinery Margin) $10 highest in the industry.
Reliance didn’t break Rs.1080 and with that as stop the stock can target Rs.1400 & 1575 target given few days before.
Our view in morning report at that time: ( On 22nd Jan 2009 Morning report)
Reliance: During the quarter ended December 2007, the company had reported a net profit of Rs 8,079 crore, which included Rs 4,733 crore of extraordinary profit on sale of stake in Reliance Petroleum. Many reports talk about $1 bn loss on hedging of crude contracts. NP above Rs.2400crs would be excellent performance by the company if Rs.2800 above profit is reported then huge short covering possible.
Reliance Industries Ltd has informed BSE regarding a Media Release dated January 22, 2009 titled "Revenue and Earnings Growth in Challenging Times; RPL Refinery started on Schedule; KG D6 Oil Production Commenced in September 2008; KG D6 Gas Production Scheduled in This Quarter".
So bottomline is that whenever RELIANCE enters into some major contract or some major deal (like RPL stake sale or forward contract) they have normally made very good judgment or the best judgment. This time they have entered into short term forward contract in Refined product do they see short term Crude prices topping out and they have sold RIL 1% stake I don’t want to read much into the transaction, will this make History again.
On Sept 10 2009 RELIANCE IND sold up to 210,000 tonnes of gasoline for October 2009-March 2010 lifting to Western trader Trafigura at a premium of 80 cents to Singapore's spot quotes on a free-on-board (FOB) basis. http://in.reuters.com/
Why did Reliance do both deal within short span and why are analyst who are familiar with RIL worried?
There have been many instances where RIL has set bench mark and most of the top and bottom has been formed after few actions taken by this company.
1) During 2002 when Crude was trading near $16, RIL made a forward contract for 1year and @ a premium to the prevailing market prices that time and within weeks that had become bottom till today.
2) RIL sells 4.01% of RPL's equity for Rs.4,023 crore Reported on 27 November 2007 and month of November2007 highest ever for the stock till now.
Monthly Graph of RPL from listing till date and November2007 has seen highest ever price and volume.
3)RIL sold refined products for one year forward @ discount when crude was around $130 around mid of 2008 and within month crude crashed.
http://economictimes.
On 22nd January 2009 In evening(6.P.M) after RIL announced results below mail was send to my mailing list:
Reliance announces result Rs.3501crs profit for the 3rd quarter which is above market estimate with GRM (Gross refinery Margin) $10 highest in the industry.
· Cash & cash equivalent in hand Rs.28, 500crs ($5.9Billion), over 95% in bank.
· Jamnagar refinery 98% capacity utilization
There where many rumor about hedging loss and Forex losses, 4month back when crude was $140 they sold 6month forward contract there entire production which I gave importance to say crude has seen peak- but I can’t find the link. The company performance has been good above market expectation.Reliance didn’t break Rs.1080 and with that as stop the stock can target Rs.1400 & 1575 target given few days before.
Our view in morning report at that time: ( On 22nd Jan 2009 Morning report)
Reliance: During the quarter ended December 2007, the company had reported a net profit of Rs 8,079 crore, which included Rs 4,733 crore of extraordinary profit on sale of stake in Reliance Petroleum. Many reports talk about $1 bn loss on hedging of crude contracts. NP above Rs.2400crs would be excellent performance by the company if Rs.2800 above profit is reported then huge short covering possible.
Reliance Industries Ltd has informed BSE regarding a Media Release dated January 22, 2009 titled "Revenue and Earnings Growth in Challenging Times; RPL Refinery started on Schedule; KG D6 Oil Production Commenced in September 2008; KG D6 Gas Production Scheduled in This Quarter".
So bottomline is that whenever RELIANCE enters into some major contract or some major deal (like RPL stake sale or forward contract) they have normally made very good judgment or the best judgment. This time they have entered into short term forward contract in Refined product do they see short term Crude prices topping out and they have sold RIL 1% stake I don’t want to read much into the transaction, will this make History again.
