RIL announces share buyback after 7 years

The Board of Directors of Reliance Industries Limited (RIL) at its meeting held on January 20, unanimously approved the buyback of upto 12 crore fully paid up equity shares of Rs 10 each, at a price not exceeding Rs 870 per equity share, payable in cash, up to an aggregate amount not exceeding Rs 104.4bn from the open market through Stock Exchange(s).

The maximum buyback price represents a nearly 10 % premium over the last closing price of Rs 792.65 on 20th January.

Market watchers and analysts tracking RIL have been speculating about the management's plans for utilising the large cash pile at RIL. The company had cash and cash equivalents of Rs 614.9bn as of September 30, 2011.

The last time RIL announced a share buyback was in January 2005 whereby it bought back 286,900 shares at Rs 570 a piece.

RIL's stock price tumbled 35% in 2011 as output of natural gas from its KG-D6 block off the east coast sank. Promoters own 44.7% of RIL equity stake, according to the Bombay Stock Exchange (BSE).

Market regulator SEBI has made it mandatory for all companies announcing share buyback to utilise or deploy at least 25% of the earmarked amount authorised by the company's Board.

Singapore govt buys 1% stake in RIL

Inflation falls to ~7.5% in December

India's annual inflation fell sharply in December from the previous month, data released by the Government showed on Wednesday. The headline WPI inflation for December fell below 8%, raising hope of some softening in the RBI's hawkish monetary policy. Inflation, as measured by the wholesale price index (WPI), was at 7.47% in December as against 9.11% in November, the Union Commerce & Industry Minister said. The December inflation print came more or less in line with expectations. The annual inflation rate was at 9.45% during the corresponding month of the previous year.

The December inflation was the lowest since December 2009.

WPI Break-up for December 2011:

Primary - 3.07% vs 8.53% MoM.

Food - 0.74% vs 8.54% MoM.

Fuel - 14.91% vs 15.48% MoM.

Manufactured - 7.41% vs 7.7% MoM.

Source: Commerce & Industry Ministry.

The official WPI for ‘All Commodities’ for December remained unchanged at its previous month level of 156.9 (Provisional). Build up inflation in the financial year so far (April-December 2011) was 4.95% compared to a build up of 7.12% in the corresponding period of the previous year. The Government revised the inflation rate for October to 9.87% from a provisional estimate of 9.73% while the WPI stood at 157.0 as compared to 156.2 earlier. Finance Minister Pranab Mukherjee today said that inflation in December fell sharply mainly because of a fall in inflation for Primary Articles, including food inflation. "Headline inflation should be between 6% and 7% in March end 2012," Mukherjee said. Manufacturing inflation, which has declined only marginally, was still a cause of concern, he said.


The softening in prices of manufactured goods would be gradual, even as non-food primary inflation is witnessing rapid decline, the Finance Minister said.  A two-year low inflation in December indicates improvement in the country's macro-economic parameters, Mukherjee said. Good industrial production numbers for November and a sharp decline in inflation indicate some improvement in the overall macro-economic parameters in the second half of FY12, he said. "This trend is likely to consolidate in the coming months with some policy correctives,"  Mukherjee added. India's economic growth in the ongoing fiscal year is unlikely to fall below 7.5%, C. Rangarajan, chairman of the Prime Minister's economic advisory council, was quoted as saying. The RBI is scheduled to meet on January 24 to review its monetary policy. An immediate rate cut is not on the cards, but there could be some moderation in the Cash Reserve Ratio (CRR). The comments from the RBI Governor, Dr. D. Subbarao and his central bank colleagues will be important for the markets.

Cooling inflation brings rate cuts forward: Moody's Analytics

FM sees headline inflation at 6-7% by March end

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