RIL sold 3.5 Cr shares from its treasury stock

Reliance Industries Ltd (RIL) does it again second time. It had earlier at the start of the 1st week of the new year sold 2 cr shares from their treasury and now the 2nd tranche of selling has taken place. RIL is trying to raise funds for its new acquisition interest in Lyondell Basell (LB), a US-Dutch based, one of the largest Polymers, petrochemicals and  fuel company. RIL’s earlier bid for a controlling stake in LB was at USD 12bn in the month of November with a view to fund the deal with their existing cash reserves of USD 4bn and selling their treasury stock of USD 8bn. RIL increased the offer to USD 13.5bn and the extra cash would be funded through some leverage which has not been decided yet. The acquisition will keep RIL in a sweet spot as the revenues expected from the combined entity will be manifold. Who knows we might just see one of the biggest acquisition in the Indian history.
RIL’s shares reacted well with the acquisition news and on the charts technically RIL looks ready for an up move. For the year 2010 RIL is a candidate to look forward to and if Nifty has to make newer highs this year then contribution from RIL goes without saying.

Recommendation: (Weekly Closing basis)
Buy RIL above 1092 with a stop loss at 1033. Target of 1161 in 4 weeks and can further  head towards 1220.
Disclaimer: Stock market investments are risky. They don’t provide fixed returns and past performance doesn’t guarantee future results. All securities investments entail the risk of great and sudden financial loss. Returns vary and you may have a gain or loss when you sell your securities.
No assurance is given that anything described here will be successful. 
Note: Don’t forget to follow strict stop losses.