Reliance Industries rose on Tuesday, bouncing back smartly after a recent hammering.

By 15:33 IST, the stock of the diversified company was the biggest gainer among BSE Sensex stocks, up 2.86% at Rs 284.55, recovering from its intra-day low of Rs 274. A relatively higher volume of over 1.54 million shares was registered on the counter. In the last seven sessions, the stock shed 9.42% from Rs 302.50 on 28 February 2003 to today's low of Rs 274.

Dealers said the recovery on the Reliance Industries counter was due to a technical bounce-back after a recent slide. One of the dealers said that institutions were supporting the Sensex stocks like RIL. DSP Merrill Lynch was said to be active on the RIL counter. Meanwhile, there were also reports that Indian refiners' exports of gasoline (petrol), diesel and jet fuel have increased of late. The exports of refined petroleum products from India were on the rise even as traditional suppliers in the Arabian Gulf have tightened supplies. There were also rumours that the government has directed Life Insurance Corporation of India to come to the Unit Trust of India's rescue as the latter is said to be reeling under the redemption pressure on some of its schemes.

In the near term, UTI is believed to be facing redemption pressure of at least Rs 300 crore, as two schemes - the Monthly Income Plan (MIP-98), which has a total corpus of Rs 788 crore (of which 22% or Rs 173.36 crore is equity holding) and the Master Equity Plan-93, which has a total corpus of Rs 135.56 crore (of which 95.4% or Rs 130 crore is equity holding) - mature on 31 March 2003 and 1 April 2003, respectively. Five schemes of UTI, with a total equity corpus of Rs 680 crore, will mature over the next five months.

On Monday, there were reports that Qualcomm, the US-based pioneer of the CDMA technology, has revived its interest in acquiring a equity stake in Reliance Infocomm, an arm of RIL. Qualcomm's interest stems from the fact that Reliance Infocomm uses the CDMA technology for its cellular handsets. Qualcomm makes money from royalties everytime a chipset is inserted into CDMA phones and other network equipment as well as from license fees when it allows other manufacturers like Samsung and LG to use its patented technology. With most of the developed world coming close to mobile saturation, China and India remain the only markets where demand for CDMA phones will grow sharply this year. Reliance Infocomm has projected a target of seven million cellular subscribers in the first year of operations.

On 28 December 2002, RIL launched mobile telephony services nationwide through Reliance Infocomm, the day being the birthday of its founder, the late Dhirubhai Ambani. Reliance Infocomm is expected to roll out basic telephony services in 17 states. It has already laid 40,000 km of optic fibre across the country to cover various facets of telecom services including basic, Internet and long distance telephony. The company is banking on a lower margin-high volume game. RIL has reportedly invested a huge sum in Reliance Infocomm - of over Rs 25,000 crore. Recently, there were reports that RIL has found additional gas reserves in the Bay of Bengal. The gas reserves in the newly-discovered block are estimated at nine trillion cubic feet.

In late October 2002, RIL said that its Krishna-Godavari basin (Andhra Pradesh) gas project will go on stream around mid-2004. The cost of development of the project may total $1.3 billion, it added. RIL is basically a petrochemicals maker (the largest in the country) and a petroleum refiner (after it merged group company Reliance Petroleum with itself). The company has emerged as one among the largest private sector players in the oil exploration segment as well.

RIL registered impressive results for the third quarter ended 31 December 2002. It posted a 24% rise in net profit to Rs 1,083 crore (Rs 10.83 billion), compared to Rs 873 crore (Rs 8.73 billion) in the corresponding period of the previous year. Total income increased by 7.58% to Rs 11,243 crore (Rs 112.43 billion) from Rs 10,450 crore (Rs 104.5 billion) in DQ 2001. The figures for the corresponding previous period have been restated to include the effect of the amalgamation of Reliance Petroleum with RIL with effect from 1 April 2001. The promoters hold 43.7% equity stake in RIL, while the public, domestic and foreign institutions hold 15.3%, 13% and 26.4% respectively.

BSE code: 500325

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