NEW DELHI: According to Goldman Sachs<http://economictimes.indiatimes.com/topic/Goldman-Sachs> Reliance Industries<http://economictimes.indiatimes.com/reliance-industries-ltd/stocks/companyid-13215.cms>(RIL) can potentially attain a market capitalisation<http://economictimes.indiatimes.com/topic/market-capitalisation>(m-cap) of $100 billion by the fiscal year 2017. The current m-cap of RIL <http://economictimes.indiatimes.com/topic/RIL> is around $46.6 billion.
To accomplish that, Goldman Sachs in its report said that Reliance needs to get government approvals on investments and gas prices, restrict its focus to core businesses and return some of its surplus cash in the form of dividends or buybacks, among other measures. Goldman has argued that investor concerns such as returns from new capital spending or the cyclical downturn are already largely discounted. "Current share price is giving little credit to management for refocusing investment in core activities and its potential impact on cash returns, in our view," Goldman said. The investment bank has maintained its "buy" rating on the stock and has raised its sum-of-the-parts target price to Rs 936 from Rs 870 to reflect improved refining and exploration and production valuations. ET had reported today that Reliance Industries is in talks with British oil giant BP <http://economictimes.indiatimes.com/topic/BP> to buy its petrochemicals plant in Malaysia as it seeks to replicate its domestic success in building fully integrated operations in all its businesses. India's largest private sector company has held talks with BP officials in Hong Kong about the 610,000-tonne PTA plant in Malaysia. "Serious discussions are happening," an investment banker with direct knowledge of the matter said. "BP will never comment on speculation," Zukifli Othman, manager (communications & external affairs), BP Malaysia, told ET. On Thu, Aug 16, 2012 at 10:13 AM, Deepankar Dutta <[email protected] > wrote: > MUMBAI: Reliance > Industries<http://economictimes.indiatimes.com/reliance-industries-ltd/stocks/companyid-13215.cms>is > in talks with British oil giant > BP <http://economictimes.indiatimes.com/topic/BP> to buy its > petrochemicals plant in Malaysia as it seeks to replicate its domestic > success in building fully integrated operations in all its businesses. > India's largest private sector company has held talks with BP officials in > Hong Kong about the 610,000-tonne PTA plant in Malaysia. "Serious > discussions are happening," an investment banker with direct knowledge of > the matter said. "BP will never comment on speculation," Zukifli Othman, > manager (communications & external affairs), BP Malaysia, told ET. An > RIL<http://economictimes.indiatimes.com/topic/RIL>spokesperson did not > respond to a set of questions on the issue till the > time of going to press. > > The plant may not be worth much (about 250 crore is the estimate from > independent industry executives), but it could ensure that RIL's operations > in Malaysia are fully integrated, as they are in India. Integration (where > all raw material is produced in the same group) helps cut costs and ensure > supply in hard times. > > RIL's Malaysia assets were bought from Hualon, the South-East Asian > nation's largest polyester maker, in 2007 when polyester profit margins had > plummeted. > > The acquisition of the PTA plant in Kuantan - located in the state of > Pahang on the east coast of Malaysian peninsula - will help RIL integrate > it with Hualon's polyester capacities. The world's largest polyester > producer is currently buying PTA from local producers. > > BP kicked off a $38-billion divestment programme in 2010 to reposition > itself as a smaller company with focus on promising markets, and to raise > cash to shore up investor confidence following the oil spill in the Gulf of > Mexico. Since then, it has divested assets worth $24 billion. > > In September 2010, BP sold its ethylene and polyethylene capacities in > Malaysia to state-run company Petronas. The British > petroleum<http://economictimes.indiatimes.com/topic/British-petroleum>giant > aims to divest another $14 billion of assets by the end of next year. > > > -- CA. Rajesh Desai -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
