Reliance ADA Group stocks in demand

Reliance Communications' plan to unlock value from real estate properties had a rub off effect on shares of other four Reliance Anil Dhirubhai Ambani group companies, which rose by 1.61% to 5.76% at 14:45 IST on BSE.

Reliance Power (up 5.76%), Reliance Capital (up 2.80%), Reliance Infrastructure (up 2.76%) and Reliance MediaWorks (up 1.61%), edged higher. Reliance Broadcast Network was down 0.74%.

The S&P BSE Sensex was down 175 points, or 0.90% at 19,320.82.

Reliance Communications (RCom) was up 9% after the company said on Sunday, 7 July 2013, that its board of directors has in-principle decided on a demerger of the real estate held by RCom into a separate unit to be called Reliance Properties, to unlock substantial value for the benefit of its shareholders. The proposed separation of real estate into a separate unit is part of RCom's strategic plan to divest non-core assets, and focus on its core wireless and enterprise business. Reliance Properties will be a separate listed company. All shareholders of RCom will receive fully tradeable pro-rata shareholding in Reliance Properties, free of cost, based on their existing shareholding in RCom.

The preliminary and indicative monetisable value of RCom's real estate on development is estimated by independent valuers at over Rs 12000 crore ($2 billion), which is equal to Rs 60 ($1) per RCom share.

Reliance Properties will work with leading global partners to develop the real estate, and unlock this value for the benefit of its shareholders. The properties proposed to be developed by Reliance Properties include prime land at Dhirubhai Ambani Knowledge City, Navi Mumbai measuring nearly 135 acres, with saleable area of over 15 million square feet and prime property near Connaught Place, New Delhi measuring nearly 4 acres.

The board has constituted a committee to consider the matter in detail, and prepare the necessary Demerger Scheme, etc. in consultation with legal and other advisors. The demerger will be subject to approvals from shareholders, lenders, Courts, etc.

The interests of the Anil Dhirubhai Ambani-controlled Reliance ADA Group range from communications (Reliance Communications) and financial services (Reliance Capital), to generation, transmission and distribution of power (Reliance Energy), infrastructure and entertainment.

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