Ril, Arm Stake In L & T Down To 5.96%
The holdings of Reliance Industries and its subsidiaries in engineering major Larsen & Toubro has dropped from 8.7 per cent to 5.96 per cent, marginally higher than the levels prevailing in 1994-95.
In 1996-97, RIL and its subsidiary, Reliance Industrial Investments Holdings, sold 67.75 lakh shares of L&T at an undisclosed price. While RIL sold 9.75 lakh shares, RIIH sold 58 lakh shares. RILs holding slid to 17.82 lakh shares and RIIH to 1.31 crore shares.
The Reliance group holding in BSES however remains unchanged at 6.10 per cent.
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A Reliance spokesman said it is the companys policy not to comment on individual transactions.
Reliance had also entered into stock lending arrangement for nearly 60 lakh shares of BSES and L&T each with an undisclosed approved intermediary.
The Reliance move has raised eyebrows but analysts and investment bankers do not attach much significance to the move. It is difficult to see how they could have lost interest.
Even recently they affirmed their interest at the analysts meeting after RIL results, said an analyst.
Reliance spokesman also refused to disclose the buyer of the shares nor the market price at which they were sold.
Market sources, including investment bankers, said the move cannot be attributed to any loss of interest.
They still have four members on the board. How can they lose interest? asked one investment banker.
RILs holding in L&T has been steadily rising till 1995-96. In 1994-95, it was 5.8 per cent, rose to 8.7 per cent in 1995-96 and then fell to 5.96 per cent in 1996-97.
Market sources said many other sister companies of Reliance hold substantial chunks in L&T and BSES and the combined holdings of all Reliance companies is estimated to be higher than 10 per cent. In BSES, Reliances holding has remained unchanged at 6.10 per cent.
However, the move confirms several reports during 1996-97 that RIL was selling L&T heavily.
The L&T scrip, which was ruling at Rs 247 in April last year rose briefly to touch Rs 301 in June and then fell drastically to Rs 199 in December before recovering to Rs 211 in May.
Reports of RIL selling the stock could have easily driven the stock down, irrespective of whether RIL led the sale spree or not.