Every one is wondering why Reliance Industries is under performing the broader index. And how long will it be so? There is no reason to worry about the company's fundamentals. In fact it posted very good numbers in Q1FY11. The reason behind it's under performance is that it will soon resume sale of its treasury stake. This will be the fourth tranche of the sale of its treasury shares & the value it will get will be around USD 1 Billion, as the part of the company's efforts to bring in cash for further expansion & acquisitions.
Couple of weeks back, the market sources were believing that the sale price of each share will be Rs. 985. However now they feel that it will be at a more discount and could be around Rs. 950 or so. Looking at these developments, I would recommend to buy the shares on every decline. The reasons: There are no negative changes in fundamentals, RIL has shown remarkable performance in Q1FY11 & the booming economy like India needs lots of energy which can be provided by RIL.
No comments:
Post a Comment