What is in Reliance Pack?

Reliance has given returns to shareholders. After all there are so many companies today, which will not exist tomorrow, but Reliance will be around here tomorrow. Even they have dragged the stock market (see the chart and data). Reliance is good investment, provided one invests them at low valuations.

Mukesh has two listed companies RIL and RPL. Anil has 4 listed companies with him and he has chosen 1 of them – R Capital to play with investments, chosen R Energy to invest in huge futuristic projects (Mumbai Metro), Adlabs to play in Media/Entertainment - R Com may be for any global ambitions.

View on Reliance Group Cos -

1. RIL - Doing exceedingly well - Refining, Petrochemical and Exploration/Production and Retail. But RIL is now in investment phase (planned acquisitions, retail expansions will such billions of dollars of capital). Also company is very heavily priced, at nearly 40 billion Dollars in Market Cap (which is big even by international standards). So RIL will be a market performer only. Remember that RIL did not correct much in last few weeks, so RIL share is not a pressing buy. One can wait for better prices.

2. R.Energy - Has ambitious plans, is part of Mumbai Metro etc. Good. But lot of operational problems in terms of their distribution cos still in red, delays in UP Power project etc. So expecting lower prices in this scrip. Avoid right now.

3. R.Capital - Surely it is rocking in terms of leadership in MF business, gaining share in insurance (without any foreign tie up), and also picking stakes in many small caps. Market Cap is pretty high (14000 crores is bit high for a non banking financial concern) so bit expensive now.

4. Adlabs - Doing lot of interesting thing, but entertainment business has lots of entrenched and powerful players.

5. R Comm. - The Telco created out of RIL shareholder wealth. I think that R Comm. is a very sensible and viable business and I do feel that this is a rightly valued company in a right sector. If RComm plays the GSM business correctly, the company can really go places.

6. R Petroleum - The refining arm of Mukesh Ambani. I feel that eventually it would get merged with RIL with terms favouring latter.

To conclude, we can say that with Ambanis - They have a track record of building competitive and scalable businesses, but they are strictly a "Promoter First" company.