Reliance Aims At Us Listing

Reliance Industries has taken the first steps to secure the listing of its securities in the US in a process that will force it to become more transparent, analysts said yesterday.

Petrochemicals maker Reliance said it appointed Deloitte, Touche, Tohmatsu International (DTTI) as its international accountant to help it achieve international standards in financial reporting, accounting standards and disclosures.

A Reliance spokesman said the appointment was a prelude to eventual listing of its securities in the US. "It is a positive move in terms of what it does," said V V Sivakumar, head of research at Peregrine Capital.

It was a continuation of steps Reliance initiated last year when it appointed Arthur Andersen to look into the redress of investors' problems, he said.

"They want to tell the world they're putting their house in order. It can only do good if they continue with it," Sivakumar added. Analysts said the bulk of the $914.0 million Reliance raised through international debt issues in the last 18 months was from the US market.

The listing of its bonds in the US would help the firm to service its investors better, analysts said.

If and when Reliance embarks on an issue of American Depositary Receipts (ADR) to raise fresh equity, the company's disclosures will have to be sharply improved, analysts said.

"They will have to declare inter-divisional sales," said an analyst. "If they do all that, it will improve valuation."

A Reliance spokesman said a revamped accounting system will help investors to compare it with its international peer group.

He said new concepts on the horizon such as the buy-back of shares required international expertise and experience.

"Reliance will work closely with DTTI and its own auditors under the Companies Act and thus be able to combine the best and relevant practices, both Indian and international," he added.