Reliance Industries shares record best performance in 3 years on D6 hopes
BY ASHUTOSH JOSHI
MUMBAI--Shares of Reliance Industries Ltd. -- India's largest listed company by market capitalization -- notched up their best one-day performance in nearly three years Monday on the hope of easing uncertainty over its exploration program in a key oil and gas block off the country's east coast.
At 0920 GMT, Reliance Industries was up 5.7% at 785.20 rupees ($14.1). Its earlier biggest one-day percentage gain of 5.5% was reported on Nov. 4, 2009.
The stock also attracted heavy trading volumes at 1.23 million shares, more than three times its 30-day average trading volume.
The gains in Reliance Industries pulled up the Bombay Stock Exchange's benchmark Sensitive Index, which was up 1.5% at 17,449.4 points.
The strong movement in the stock follows a report in the Economic Times newspaper, which said that Reliance Industries has agreed to show the financial accounts of its east coast offshore block with the federal government's auditor.
The report said also that the company will share the details ahead of a meeting of the block's management committee, which is likely to sit Tuesday, to consider new discoveries.
The company couldn't be immediately reached for a comment.
Reliance, India's largest private refiner by output, and BP are struggling with declining output at the D6 block.
India's oil ministry and Reliance are already fighting a battle over D6 capital expenditure.
Last year, the company approached India's Supreme Court to seek the appointment of an arbitrator as the ministry wants Reliance to forego $1 billion in cost recovery because the production from D6 failed to meet the target
The company, led by the country's richest man, billionaire Mukesh Ambani, had cash and equivalents worth 707.32 billion rupees as at the end of June.
The company is investing in telecom, retail, homeland security, financial services, hotels and media, and looking to cut exposure to India's heavily regulated oil and gas sector. It has also purchased shale gas acreage in the U.S.
However, investors have been concerned as the company continues to see difficulties in its core operations.
The stock has gained about 13.3% this year, in line with a 12.9% gain in the benchmark Sensex, while other blue-chip stocks such as Larsen & Toubro Ltd. and HDFC Bank Ltd. have gained 41.6% and 40.9% in 2012, respectively.
Dow Jones Newswires