Reliance Industries - Stock Buyback
| Case Code: FINA002 Case Length: 08 Pages Period: 2004 Pub Date: 2005 Teaching Note: Not Available |
Price: Rs.300 Organization: Reliance Industries Industry: Petrochemical Countries: India Themes: - |
Abstract Case Intro 1 Excerpts
Excerpts
Background Note
A Reliance spokesman outlined in detail the objectives of the programme:
- to manage stock price volatility, lower the beta of the stock and attract long-term investors into the company;
- to return money to the shareholders in a tax efficient and investor friendly fashion without sacrificing growth opportunities;
- to improve return on equity; reduce floating stock, enhance long-term price performance and in the long term enable the use of RIL stock as a currency for acquisition;...
The Options
Speculation also mounted on the possible route RIL could take for the share buyback. Essentially, the RIL board had two options - open market acquisitions of the shares through the stock exchanges or tender offer using a fixed price...
The Road Ahead
On 27th December, the Reliance board after its meeting approved a price not exceeding Rs 570 a share for buying back equity worth up to Rs 2,999 crore (10% of the company's total paid-up equity share capital and free reserves as on 31st March, 2004) from the market, starting 10th January, 2005...
Exhibits
Exhibit 1: The Reliance Group
Exhibit 2: Brief History of Reliance
Exhibit 3: Share price chart
Exhibit 4: Ownership Pattern
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