Janus acquires 5.64% stake in Reliance

This represents the largest investment ever made by an FII in the equity of any single Indian company, through either the primary or secondary market route. This also represents over 30 per cent of the cumulative net FII investment of $ 1.5 billion in India, in the calendar year 2000.

The total investment by international investors in RIL now exceeds 23 per cent of its equity share capital. At current market prices, this represents a value of approximately Rs 10,000 crore. This compares with `nil’ international investment in RIL back in 1992 and a level of less than 10 per cent in 1995.

The announcement was made under a regulatory requirement whereby companies are required to intimate stock exchanges when share purchases exceed five per cent of a company’s equity capital. Shares of Reliance were up Rs 9 at Rs 334 on the Bombay Stock Exchange today.

Janus, which has $ 350 billion in total assets under management, has over three million retail and institutional investors. “The substantial investment in RIL shares by Janus reflects the growing international appreciation of RIL’s fundamental strengths and excellent earnings growth prospects,” said an analyst, adding, “the significant FII buying in RIL after the announcement of a maximum stock buyback price of Rs 303 per share, reflects the support of the international investing community for RIL’s stock buyback programme.”

According to market circles, the Rs 300 price level is likely to now act as major support for RIL shares, for the following reasons: FII buying of nearly 6 crore shares completed at that level, potential buying of 4 crore shares under the stock buyback at Rs 303 and potential `creeping’ acquisition of 5 crore shares by RIL promoters in the pipeline.

RIL is India’s largest private sector company, with sales of over Rs 20,000 crore (nearly US $ 5 billion) and net profits of over Rs 2,400 crore (over $ 550 million).