"RIL & RPL MERGER"

Market analysts, however, believe that the merger may affect the group`s credibility. They explained that investors may think that the promoters of RIL float a new company, raise capital for it from the public and when the new company commences operations, they merge it with RIL to get tax benefits.



"Since this has been done once earlier, RIL will lose credibility in the market and people will think twice before investing in the shares of Reliance group of companies. How it really impacts will be evident if RIL promoters issue an IPO for the new company. It may turn out that people are not interested in investing in the new company at all," an analyst said on the condition of anonymity.

"The RIL-RPL merger is a planned move. RIL wanted to avoid the financial risk involved in setting up the RPL refinery. So it invited the public to share that risk a couple of years back," said Nitin Parikh of Nitin Parikh & Company. He added that now that the project is about to commence operations, RIL wants the company to be merged so that it can enjoy a number of benefits.

Source: DNA