Reliance Industries Limited was down graded by BNP Paribas and Citigroup Global markets Inc – from buy to hold and from hold to reduce. The gain of over 40% in the share prices is not justified by the performance of the company. The increase may be due to the sudden liquidity rush in Indian markets. The RIL plans to spend about US$4.5 billion on projects this fiscal. The recession world-wide cut demand for fuels and the fourth-quarter net profit fell 9.2% to US$709 million.
Under the circumstances, whether it is justified to merge RPL with RIL in the ratio of 1:16? The shareholders are fooled/confused by these “merger-de-merger” techniques of Ambanis.
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