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Reliance drops on share sale

September 17, 2009

Shares in Reliance Industries ended over 4 percent down at 2,086 rupees on Thursday while the BSE Sensex ended flat.

Reliance, which has over 13 percent weightage in the main index, dropped as much as 97 rupees making it the top loser in the index.

The company raised nearly $660 million by selling 15 million of treasury stock at an average price of 2125 rupees, a discount of 2.7 percent pulling the stocks down more than 5 percent and BSE Oil & Gas Index by 2.8 percent.

The stock ended with volumes of 12.94 million, its highest since April 2006.
Reliance Industries has a market value of about $71 billion or 3436.54 billion rupees according to Thomson Reuters data.

Some analysts believe the share sale was aimed at increasing the cash position of the firm while others see it as a move to improve the company’s balance sheet for acquisitions overseas.

“In our opinion, overseas exploration and production assets could be likely targets,” said Harshad Katkar, an analyst at brokerage UBS.

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