RIL UP on diversification plans
Reliance Industries rose on reports the Mukesh Ambani Group is close to signing an equal joint venture agreement with global private equity and hedge fund company, DE Shaw, to enter the financial services sector.
India's largest private sector company by market capitalisation has an equity capital of Rs 3270.71 crore. Face value per share is Rs 10.
The tie-up will enable the Mukesh Ambani group, whose flagship company is Reliance Industries (RIL), to offer services like energy and carbon trading and related derivatives, the media report suggested. It will also participate in sectors such as private equity and mutual funds, the report said, adding that the joint venture may eventually seek a banking licence in India.
It was, however, not clear whether the joint venture would be set up under RIL or held directly by Mukesh Ambani.
Mukesh Ambani was freed to enter the financial services sector last month when he ended a pact with his brother Anil Ambani that prevented them from competing on each other's business arenas. When the brothers split up the family empire in 2005, Anil Ambani got control of financial services firm, Reliance Capital.
Earlier this week, Reliance Industries announced seventh oil discovery in exploration block in Cambay basin, awarded under the NELP-V round of exploration bidding. Reliance Industries (RIL), as Operator, holds 100% Participating Interest (PI) in the block.
This discovery, named 'Dhirubhai-50', the seventh oil discovery in the block so far, has been notified to the Government of India and to the Director General, Directorate General of Hydrocarbons. The potential commercial interest of the discovery is being ascertained through more data gathering and analysis.
Last week, RIL said it will invest in shale assets of US-based Pioneer Natural Resources. Under the agreement, RIL will acquire 45% interest in Pioneer's core Eagle Ford shale acreage in south Texas. RIL will pay $1.31 billion for its implied share of 1,18,000 net acres. The transaction will include combined upfront cash payment of $263 million and deferred payments of $1.05 billion associated with a carry arrangement for 75% of Pioneer's and Newpek's capital costs over four years.
Media reports suggest that shale gas accounts for between 15% and 20% of US gas production but is expected to quadruple in coming years.
Recently, RIL signed a revised gas supply agreement with Anil Ambani-controlled Reliance Natural Resources (RNRL), as directed by the Supreme Court. The Supreme Court had ordered the two companies to renegotiate the Gas Supply Master Agreement, which was signed between the Ambani brothers as part of the business demerger in 2005.