Today’s session looked liked some serious cuts were in the offing in the earlier part of the day; however, with the “bada bhai” Mukesh throwing his weight around, who can mess around. RIL appears set to announce a Buy Back program in the upcoming Q3FY12 result announcement this Friday, 20th January 2012 and the stock has hit 5% uptick almost easily through the day ending at a respectable INR 780 or thereabouts.
By the looks of it, we think that there appears that the buyback price should be in the range of INR 875-950 range and that would make a statement to the world telling that the ‘bhai’ actually thinks his company is more valuable than the market is pricing it. This also could just be a confidence booster; for starters if the share price drops then actually the buyback would be in place, and if it rises in expectation, then he actually need not make the full buy back. Either ways ‘bhai’ wins.
As a result of the surge in RIL share price today, the Nifty index stayed afloat for most part of the day since RIL alone held 20 pts, in a sessions where the index was down marginally 10points, thereby protecting a larger downside.
What is interesting though to see is the extent to which this fall can be stemmed by the big mover of the day. My sense is that we could be struggling to keep higher levels since even with nice earnings being reported by the IT biggies, we are not holding on to levels achieved. What happens when the banks report and ugly number, if at all, come out is everyone’s guess.
All, in all looks like an interesting build up of things to come; looks like.
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