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Ambani: Centre of attention
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Mumbai, June 6: Expectations are high on the eve of Reliance Industries’ 30th annual general meeting tomorrow with shareholders looking forward to owner Mukesh Ambani making some announcement on utilising the company’s massive cash reserve of around $14 billion.
Observers also expect the Reliance chief to provide details of the firm’s growth plans in telecom and offer clarity on the critical issue of gas production, particularly on the Krishna-Godavari (KG) basin.
The annual general meeting comes at a time the Reliance scrip is having a rough ride on the bourses because of persistent concern over the declining output from the KG-D6 block and a challenging macro-economic environment in India and overseas.
In the fourth-quarter ended March, Reliance witnessed a 21 per cent drop in net profit — the second successive fall — because of lower margins from the petrochemical business.
In the current calendar year, the stock has hit 52-week lows on more than one occasion and is now trading at Rs 714.10, marginally higher than Rs 706.95 during the beginning of 2012. The share had hit a 52 week low of Rs 671 last month, marking a 30 per cent fall from a high of nearly Rs 958 in June last year.
Market circles attribute this small gain to the share buyback programme. “It’s the buyback programme that is holding up the stock, otherwise it would have been under much more pressure,” said an analyst who did not wish to be identified.
Observers expect Ambani to announce the road map in not only petrochemicals but also in organised retail, shale gas and telecom. “The markets are looking for what Ambani has to say on gas output at KG-D6 and how the Rs 75,000-crore of cash will be utilised. There also could be some announcements on 4G and organised retail,” Jagannadham Thunuguntla, strategist and head of research at SMC Global Securities, told The Telegraph.
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