Rpl

Most analysts are worst than average investors.

The best analysts keep their mouths shut and make loads of money using their analytical and trading skills. The rest show up on TV offering nonsensical advice, offer training courses and write books to make money.

These days anyone who can wear a tie and suit and speak in circular technical jargon can claim to be an analyst.

Atleast in cricket, the game commentators like Ravi Shastri, Mohinder Amarnath had achieved great success in their heydays.
Most of these analysts have not made any significant money through trading but rather through preaching and selling advice.

Today the markets closed up 2% but RPL was down 4%. So much for zooming towards Rs 400. That being said, RPL is definitely a good stock for the long term.
In the coming days, I feel we will see it fall to Rs 185 before we see Rs 250 as there is still weakness in this stock.

There are all sorts of stories being circulated to justify the steep correction of 30% in RPL price. Falling oil prices, F&O ban, FII selling etc.
At the end of the day, it is what it is !!
The F&O ban happened because all the speculators jumped in to make a killing expecting the price to go to Rs 400 thus adding to huge open interest. When the price started to fall instead of getting out with stop losses, they held on to their positions expecting to exit at break-even and go crushed. Last Thursday and Friday wiped out all those speculators and weak hands.
In trading and poker, money is transferred from the foolish weak hands to the smart hands.
So who will take the stock to Rs 400 this time - speculators ? Or the insiders ?

There is no basis for Rs 400 in the next 3 months. If the price of oil starts climbing above $100, it will put pressure on demand thereby depressing the whole markets and economy.


That being said, RPL is definitely a good stock for the long term. But predictions like Rs 400 by December end etc are meaningless.

This posting is from Moneycontol...I hold 200 stock of RPL@199 so No hard feeling on me to post this.Thanks

BEWARE RPL investors !

Has Mr. Ambani done in the RPL investors ?? Unwittingly YES perhaps !!

On Friday Mr. Mukesh Ambani made one of the most ill-conceived moves in corporate governance (I would prefer to blame his team of advisors, than HE himself). They say one wrong move in FnO can wreck a trader ... little do they realize that it can wreck empires too !

RPL stake sale was a singularly selfish action in so far as it was to enable Reliance Industries to resume trading in the derivative segment of its subsidiary as it was forced to stop trading after its long positions heavily outnumbered short positions in the stock and breached regulatory limits.

After its sale of 180 million shares, Reliance's shareholding has come down to 71 percent, it said. U.S. based Chevron Corp owns 5 percent in Reliance Petroleum. I am not surprised to know that Chevron Corp, the No. 2 U.S. oil firm, said on Monday it was evaluating its options for its stake in India's Reliance Petroleum, in which majority owner Reliance Industries sold 4 percent last week.

Chevron owns 5 percent in Reliance Petroleum and has an option to raise its holding to 29 percent.

Analysts say the U.S. major may review its plans for the option after Reliance Industries sold 4 percent for $1.0 billion last week, lowering its stake to 71 percent.

"Chevron continues to evaluate our options with our ownership in Reliance Petroleum. We will provide specific project updates when definitive decisions are made," a Chevron spokeswoman for its Asian operations said.

It is quite obvious that unwittingly though Mr. Mukesh Ambani has dealt a death-knell to RPL investors. The investors who were trapped in RPL's recent run upto 295 seem surely doomed. Sorry Mr. Ambani, your move was as ill-conceived (ask RPL investors) as it was premature (ask Chevron).

Surely enough RPL plumetted to a Monday close of 204 (-2.65%) in a already doomed scenario.

***************************************

Mr Mukesh ambani is a very smart person.
He is the best judge of the correct price of the RPL stock.
He made sure like a good investor to book profit after the stock rocketed from 200 to 300 levels.

The rumor in the market was that Chevron was suppose to increase its stake from the current 5 % but since that has not happened Mukesh sold of the 4 % and will in the coming months sell another 1 % of RPL in the open market.

As the agreement stands if Chevron does not increase its stake then RIL can buy back the chevron stake in RPL at a price very close to the issue price.

So as a smart investor mukesh has sold off 4+1 = 5 % RPL stake in open market for the price of 223 but he will get the same 5 % back from Chevron at a price much lower than that.

The net transaction effect is that Mukesh’s stake in RPL stays same …..chevron goes back with its money and the poor retail investors who are stuck with this stock at 250 to 300 levels are the ones left holding the baby.

So the bottom line is if u have picked RPL below 200 levels then be smart as mukesh and book profits.:

This is a nonsensical statement. F&O is a zero sum game - longs cannot outnumber shorts or vice-versa. For every long contract there must be someone who is short one contract and vice-versa.
The only thing that changes is the open-interest. How can I buy a F&O contract if someone is not creating a short position or taking profit on an existing long position.

It was speculators and the media who were hyping that the stock would reach Rs 400, and not Mr Ambani. It would be a mistake to term speculators as investors.

Greed is good ... and greed is bad. It works both ways !!

Anyone who is thinking that RPL is history would remember my words again & again during his trading career.

RPL is going to remain a leader in this bull market, and if anyone has noticed all the bad news has been really well absorbed by RPL otherwise with such pessimistic news a stock should tank like anything but all that RPL is doing is consolidating at same price levels, traders should be accumulating RPL between 190-205 levels as it may consolidate for a while now but will eventually skyrocket and all those who had missed the bus earlier will miss it again

I agree, it has already absorbed the bad news, still shows resilience, because of the potential growth and enormous profit potential and world class refinery. It is developing so fast that they are planning to start operation in March 08 itself.

Bad news is circulated by people, to make the stock price low, and then they accumulate it, but it is going in vain.. the stock has very much resilience and keeps consolidating...

No one knows, when it zooms, by the time, all the so called blashers will miss!!

i'm also holding rpl..its a good pick for 3months and more..it will kepp buyers busy at 180-195..it'll surely touch 400-500 but do not expect miracles..overvaluation of this stock is not possible in coming months..it'll have a steady updrift once the -ve news settles down

Here we need to concentrate on two things.

Are we traders or Investors? A trader would definitely have an entry and exit criteria.. he wont be keep saying if stock bottoms I would pick it up. He is not biased.

In the other hand, Investor likes to pick the stock at low prices and wait for to appreciate in a period of time.

This discussion going on is not very clear. Some r traders and some r investors. Its not good for traders to think that I keep on picking if it goes below.

Great traders like saint latch on the trend and reap the benefits and get out once its previous pivot low is broken (They dont say this will be a multibagger after 1yr or so and their production will start after march 2008. If it picks up again, they will join again and enjoy it).. Ahhh when can we become so smart

Raj

Rajesh the view that i am giving is exactly of a trader and not an investor, if we close our mind and ears for sometime and view charts of RPL then you will notice that RPL is trading near its 50 day ema of 190 which should always be considered as a good entry point for a stock in uptrend and coming to the trend in my view its still up until it goes and break 175 - 180 levels which according to my analysis is highly unlikely

RPL Holders Kindly read this (Taken from Mr.Tulsian's site)-

"Reliance Industries Ltd. (RIL), holding company of Reliance Petroleum Ltd. (RPL), has sold about 4.01% stake of RPL, being 18.04 crores equity shares, for Rs.4,023 crores, at an average price of Rs.223 per share. This has reduced stake of RIL in the RPL from 75% to 70.99%.

The share price of RPL has witnessed a lot of volatility, especially in F&O segment, in the current month series of November, when share price fell from Rs.295 to now at Rs.215. The scrip RPL, was also under ban, till Friday, in F&O, due to Market Wide Limit having crossed 95%. But now, from today, the scrip has resumed trading again in F&O. This was also first instance when a scrip of NIFTY 50, came under ban in F&O segment.

The market report indicates that about 12 crore shares are in open interest in future segment, apart from additional open interests for Put and Call, in options segments at various rates for three months. While taking a feel of retail investors’ position, majority of them are long on the scrip, and since the scrip was under ban, they kept continuing with open position, even after paying mark to market losses and incremental margins, imposed due to higher volatility. Conversely, informed circle is reported to be short in the counter, for matching open interest.

Initially, short positions seems to have been created by the informed circles, at the higher levels of Rs.275 plus, obviously, finding these price levels as unrealistic, and subsequently, actual sell has been triggered by RIL in cash market, thus realizing an average of Rs.223 per share. This has resulted in reverse arbitrage, till last week, when cash segment ruled higher than F&O. This also indicates paucity of floating stock.

Shareholding pattern of RPL is as under :--

1)RIL 337.50 cr shares being 75% Rs.3,375 crores

2)Chevron 22.50 cr. shares being 5% Rs.225 crores

3)Public 90.00 cr. shares being 20% Rs.900 crores

Total 450.00 cr. shares being 100% Rs.4,500 crores

RIL has acquired its 75% stake as under :--

1)270 cr. shares at par Rs.2,700 crores

2)67.5 cr. shares at Rs.60 per share Rs.4,050 crores

337.50 cr. Total Rs.6,750 crores

RIL has almost realized its cost of Rs.4,050 crores for subscribing 67.50 shares, in April 2006, at Rs.60 per share. Since, investments sold are based on FIFO (first in first out) basis, shares having subscribed at par were presumed to have been sold, on which long term capital gain of Rs.3,842 crores, has been earned by RIL, which is tax free.

So, effective cost of 71% stake in RPL, for 319.46 crores shares are Rs.2,727 crores, translating into, cost per share at Rs.8.54 . The market value of this is close to Rs.67,000 crores.

One may recall, that Chairman of RIL, Mukesh Ambani, in company’s 33rd AGM held in October in Mumbai, had stated that the company would be capitalizing on the investments held, including that of RPL. Nobody, could predict this move, likely to be taken by RIL at a future date.

Now what could be likely move and developments, post this minority stake sale: -

1) The control of RIL on RPL is not affected as this is a minor dilution, and 71% stake is quite reasonable, in the mega refinery, which would vastly improve the consolidated results of RIL.

2) RIL would have an other income of Rs.3,842 crores, in quarter ending December 07, which would give an extra EPS of Rs.26.50, on enhanced equity of Rs.1,453 crores, post IPCL merger.

3) RIL has been able to mop up close to Rs.4,000 crores (tax free) when it needs funds, for its capex programme at K G Basin.

4) RIL may further decide to offload .99% stake, being 4.46 crore share, and realize close to Rs.1,000 crores, and keeping its stake in RPL at 70%.

5) Chevron, presently has 5% stake in RPL, with an option to raise it to 29% by June 09, post commencement of refinery. The preferential allotment can only be made, based on SEBI formula, which would be at Rs.200 plus, (presuming market price to remain above Rs.200). At this rate, Chevron may not be interested in raising its stake to 29% as it would need close to Rs.30,000 crores. Hence, Chevron, would opt to offload its 5% stake in favour of RIL, at Rs.60 per share, as per the terms of the share subscription Agreement.

6) On happening this event, RIL would be able to raise its stake, back to 75%, at a cost of just Rs.1,350 crores.

7) The informed circles, having initiated shorts in F&O at an average of Rs.275 per share, are repored to have made a gain of Rs.1,000 crore plus.

Now, let’s take a call, how share price of RPL is likely to behave, in coming times.

1) As majority of retail investors are long, they would opt to roll over their positions in December series, as bullish outlook on the stock, continues, for various reasons (no need to elaborate them).

2) Informed circle, holding short position of close to 10 crore shares, may not be interested in rolling over, as market perception has changed positive, on the stock. But, in this case, they may be interested to see a lower rate, on closing day, (Thursday 29th November) to enable them to have a better close out.

3) Since, no more, delivery based selling is expected on the counter, weakness may not be seen from beginning of December F&O series

4) If informed circle, tries to bring down the price on closing day, lot of interested buying may be seen, below Rs.200 per share, from investment and arbitrage view point.

In nutshell, this was a calculated move, by RIL, whereby, huge cost has been recovered, coupled with retaining majority and respectable stake. Also, the market (cash and F&O) is in full control of the management, which would take direction, on the next move of the management, as that will have far reaching consequences.