Reliance industries growing very high

Reliance Industries advanced 3.25% to Rs 1266, after the company said it plans to raise $ 2 billion (around Rs 9,000 crore) for oil and gas exploration and production.

The stock surged to lifetime high of Rs 1268, a little while ago, as buying intensified. The counter clocked huge volumes of 23.36 lakh shares on BSE, much higher than its half-yearly average volumes of 20.71 lakh shares on BSE.

The company has scheduled a meeting of its board of directors on 09 November 2006 for approving a proposal to raise funds. The funds will be raised by way of Foreign Currency Convertible Bonds (FCCB), syndicated loan or fixed or floating bonds.

RIL will invest $5.2-billion to double the output from its D6 block in Krishna Godavari basin to 80 million standard cubic meters per day (mmscmd). RIL had earlier proposed investment of $2.47 billion to produce 40 mmscmd for 7.5 years from discoveries - Dhirubhai 1 and 3 (in the D6 block) - out of total 34 wells.

The company has made a dozen discoveries from the 15 wells drilled in the deep-sea but only the first four discoveries - Dhirubhai 1, 2, 3 and 6 - have been declared commercial. Reliance holds 90% interest in Block D6 where it estimates reserves in excess of 14.5 trillion cubic feet. Niko Resources of Canada has the remaining 10%.

On 30 October, RIL announced launch of its first retail format called Reliance Fresh in Hyderabad. These 2,000-5,000 square feet "friendly neighbourhood stores" will sell fresh fruits, vegetables, staples and other products. The store at Banjara Hills will be among a set of pilot stores that the company plans to open in Hyderabad on 03 November. RIL would invest close to Rs 25,000 crore over the forthcoming five years in the retail business.

Despite heavy erosion in gross refining margins globally, RIL reported a 9.2% growth in bottomline for Q2 September 2006 to Rs 2,709 crore (Rs 2,481 crore) on the back of a strong performance by its petrochemicals segment. Net sales increased 37.40% to Rs 28,474 crore (Rs 20,717 crore). RIL’s petrochemicals margin rose in the July-September 2006 quarter on account of lower input prices. Analysts expect, a strong outlook for global petrochemical and polyester margins as supplies are likely to remain tight in the medium term.

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