Reliance Pack: The Road Ahead

Cynosure of all Investors, But What to do ?
Investment Guru puts a Rs. 700 tag on Reliance Industries

The Reliance Saga is on its climax. If you want to get the share in the would be listed companies of Reliance , you will need to buy reliance today. If you don’t want these new shares , you will need to wait till tomorrow to buy in only the Reliance Industry scrip. The basic question in minds of all investors is what to do?
What to do?
It’s a million dollar question right now. The reliance industries stock is going to serach its standalone value tomorrow. The scrip has been quite volatile in last few sessions with huge volumes. Thereare lot of talks on the street over the valuation of Reliance and the to be listed entities. The buzz is that the value of the new entities (the 4 companies) will be in therange of Rs. 250. If we assume the closing price of reliance today at Rs. 900 (looking at the ternd), the price of stanalone RIL comes to about Rs. 750.
What are the Hazards in buying and holding today?
If you buy today or if you keep a hold today of your earlier position in reliance, the only problem that comes is the value in the four newly listed companies will reamin unlocked till they are listed. They are expected to be listed by April 2005. So till the part of your holding gets blocked.
The positive side
The positive of buying in reliance today or hold it is if tomorrow the markets place s a good premium to the standalone Reliance Industries, the buyers today will stand to benefit.
What should be the right strategy?
For those who do not hold Reliance Industries scrip today, the best deal would be to buy in 50% of your target today and buy 50% at tomorrow‘s price. This will average out your cost of purchase and will also give you beneift when the other entity lists. However if you are already invested in the Reliance Industries stock and have a long term view on Reliance, Investment Guru recommends you to hold your positions. In summary, whether you buy today or tomorrow , it just depends on your outlook on Reliance. However,Investment Guru is of view both sides should be winner in long term.

4 comments:

abhishek said...

I have 4 reliance share (RIL) what to do, I have no problem to hold them till april, but question is to get shares of new companies do I need to have shares in multiple of 100 ??? ( like 7:100 ratio allotment ?)

Please answer this

Rajesh Soni said...

No you dont need to have shares in multiples of hundred. You can hold to your shares.

Abhishek said...

Thanks sir,

Can i know your yahoo id if you willing to tell me .. else its fine with me, I am really impress with your blog, regular visitor

anil k bhadoria said...

your opinions are investor friendly & honest.keep it up.