X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Reliance bids for 20% of BSES - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • May 19, 2000

    Reliance bids for 20% of BSES

    Reliance Industries, one of India's largest private sector enterprise has announced its intention to make an open offer to the shareholders of BSES Ltd., one of India's largest power generation and retail distribution company, under the Securities Exchange Board of India (SEBI) takeover code. Reliance already holds around 15% in BSES Ltd.

    The open offer will be made for 20% of the subscribed and fully paid up equity capital of BSES (approximately 27.55 m shares) at a price of Rs 234 per share, aggregating around Rs 6.5 bn. The acquisition will be made from Reliance internal resources. The BSES stock closed at Rs 255 today. The offer price (Rs 234 per share) represents the minimum 26-week average price specified under the SEBI regulations. The offer is slated to open in June 2000 for a period of 30 days.

    Reliance's bid, if it goes through, will give its power sector ambitions a big boost. The company has already stated that it wishes to setup capacity of over 10,000 MW within a decade. BSES's experience in operating power plants and selling it to retail customers will benefit Reliance. Furthermore, Reliance's Internet plans would benefit from BSES's recent foray into this sector (it is already in the process of laying its fibre optic cable network).

    BSES on the other hand stands to benefit from the financial strength of the Reliance group. This would help in cutting down its debt burden, which at the end of FY99 stood at Rs 9.2 bn. Lower interest costs (Rs 1.1 bn in FY99) would then boost profit margins. Furthermore, BSES could benefit from the deal making abilities of the Reliance Group.

    The takeover seems to be in the best interest of both the companies. However, what is interesting to note is that the offer price is lower than the current market price. Therefore it is unlikely that retail shareholders will opt for this offer. Institutional shareholders may however choose to exit, as they are unable to liquidate their large holdings in the market without adversely affecting the stock price.

     

     

    Equitymaster requests your view! Post a comment on "Reliance bids for 20% of BSES". Click here!

      
     

    More Views on News

    NTPC: Higher Tax Provision Impacts Profits (Quarterly Results Update - Detailed)

    Mar 30, 2017

    NTPC declared results for the quarter ended December 2016. The company reported revenue growth of 10.9% while profits declined by 7.5% YoY.

    More Views on News

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    It's the Best Time to Buy IT Stocks(Daily Profit Hunter)

    Aug 16, 2017

    The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    RELIANCE IND. SHARE PRICE


    Aug 23, 2017 01:50 PM

    TRACK RELIANCE IND.

    • Track your investment in RELIANCE IND. with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks

    RELIANCE IND. 5-YR ANALYSIS

    Detailed Financial Information With Charts

    COMPARE RELIANCE IND. WITH

    MARKET STATS