Reliance Industrial Infrastrucutre Ltd............

Reliance Industrial Infrastrucutre Ltd moved up to Rs.844 before cooling down a bit. According to a noted analyst: "Reliance Group is trying to make Reliance Industrial Infrastrucutre Ltd, a full-fledged gas carrier because the Krishna Godavari (KG) Gas basin production has started. The Reliance Group is the promoter and the Ambani family has set up the gas pipeline from Kakinada to Baruch of 1,400 km with a capital outlay of close to Rs 3,500 crore. That pipeline is not owned by Reliance Industries or by listed company but by a closely held company, so the idea was that this company will get merged or this project will be taken over by Reliance Industrial Infrastructure and becomes a full-fledged gas carrier company.
He further added, the present turnover of Reliance Industrial Infrastructure is at about Rs.60-70 crore on which they make a profit of close to Rs.20 crore. Suppose, once they takeover this project their topline can balloon, maybe to about Rs.600-700 crore with bottomline of about Rs.200-300 crore, so that will give a very good jump.
Presently, 45% stake of Reliance Industrial Infrastructure is held by Reliance Industries Limited suppose there is a chance or if one presumes that this pipeline company gets merged with this Reliance Industrial Infrastructure, this company will come to its size having a very good presence. Then in future because the group is planning to lay pipeline across the country maybe from Kakinada to the Central part of the country to the southern part of the country, as well as the city gas distribution project can be taken up by this Reliance Industrial Infrastructure.
So they will be taking a reasonable size of this company, which translates into a market capitalization of close to USD 2-3 billion and those argument or those expectations seems feasible the gas production started from KG basin, this 1,400 km pipeline can get merged into this company. If that happens then this will vastly change the fundamentals or vastly re-rate the Reliance Industrial Infrastructure from hereon.
And if the plant gets moved on or gets advanced on these fronts the share price can even cross four-digits".
He further states, " Reliance Industrial Infrastrucutre Ltd (RIIL) is is a closely held company, the shareholding is not owned by Reliance Industries or any of the listed arms. For sake of argument if it gets merged and they issue the shares the effective shareholding of the Reliance Industrial Infrastructure post merger will be held by the Ambani family, maybe to the extent of 45% by Reliance Industries which is held by them now. But thereafter the additional or the new shares will get issued to the Ambani family in their personal capacity."
What I feel is that at the current market cap, the stock is still looking cheap considering the potential of the company going forward. Moreover, the fact that it is associated with Reliance Industries Ltd, who is holding 45.43% of the shares of the company, adds further value for the shareholders. Also, Reliance Capital Ltd is also holding position in the company. So both the "Ambani Brother" are having holdings in the company, which further adds to the value.
Now if Anil Bhai Ambani, wants to further increase his stake in the company, from the present paltry state to have further say in the company's activies, I cannot imagine to what price the share can shoot to.....May be Rs.5000 or may be more; considering the topline of Reliance Industrial Infrastructure Ltd of about Rs.600-700 crore and bottomline of about Rs.200-300 crore. ...Therefore, remain invested and keep a strict watch on the counter.
sumanspeaks: