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about:blank CORPORATE 11 Sep 2010 Not The RIL You Know Investors are not enthused by its non-oil business investments Rajeev Dubey Even as doctrine Industries (RIL) made the shock announcement of acquiring a picayune over 14 per cent equity in cordial reception chain EIH on 30 August, the market hammered its beginning on the NSE to its 52-week low of Rs 919.15, down 13.57 per cent from its nine-month peak. This was the latest in a series of announcements by the Rs 2,00,400-crore RIL about investments in areas separate than its core business of oil and gas, perplexing investors about the bare-assed investment behaviour of Indias largest private firm. Earlier in April, an RIL arm spent an estimated Rs 90-135 crore to buy 26-49.9 per cent equity in Deccan 360, a cargo transport firm promoted by master G.R. Gopinath. In June, as soon as the Department of telecom declared the victors of the broadband wireless licences, RIL pumped in Rs 4,800 crore for 95 per cent equity in Mahendra Nahata-promoted Infotel Broadband Services, the only winner of 22 licences covering the nation. Hospitality, aviation and telecom apart, over the years, RIL has invested in sports, retail and SEZs. In 2001, it floated Reliance Life Sciences to enter the pharmaceutical industry.

Shareholders have been left wondering if RIL is morphing itself into a conglomerate much(prenominal) as GE or United Technologies that dabble in diverse businesses. Its (non-oil investments) a big thumbs down from me, says Mumbai-based Amritakala, an RIL shareholder for 10 years. I dont know wherefore they are investing in aviation and hotels. Communication is pipe down okay, but not retail. They must not go everywhere. A Royal Bank of Scotland report released after RIL bought equity in EIH says, RIL is moving towards a conglomerate status, which it had discarded in 2005 via the demerger. This creates a risk of a conglomerate discount emerging, as investors may prefer to buy pure-plays on telecom, power, etc. RIL has kept still on any... If you want to get a full essay, sound out it on our website: Orderessay

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