labels: finance - general, investment - general, markets - general
Split to boost stock valuenews
20 June 2005

Analysts say that feud about the ownership of Reliance and a lack of transparency related to Reliance's "strategic" investments in Infocomm had prevented the full value of the investments - nearly 30 per cent of the balance sheet - being reflected in stock price.

They say that ever since the dispute spilled out in the public domain, the stock has under-performed by between 10 and 15 percentage points.

"This will be corrected as valuation visibility emerges on both sets of businesses and the holding company discount goes away. Stronger free cash flow will also translate in to better dividends payouts in the core company."

A Mumbai-based analyst in a broker's firm expects the valuation of the two entities to yield a value in the range of Rs700-Rs 740 per share.

also see : Sensex crosses 7000

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Split to boost stock value