Saturday, December 24, 2011

RIL - Sirf naam hi kaafi hai

Assume you have a huge cash pile with you.

You can invest it
OR
You have the choice of investing or putting it in FD/NCDs till you decide what to do with it.

Person who opts for option 2 will be appreciated as being prudent.

RIL is doing just that.

Have a look @
http://economictimes.indiatimes.com/special-report/mukesh-ambanis-ril-not-buying-despite-its-huge-pile-of-cash/articleshow/11087027.cms

25 Bn USD of cash ----- uh

News:
RIL buys stake in Nuclear Design Company -
http://www.hindustantimes.com/business-news/CorporateNews/RIL-buys-stake-in-Terra-Power-US/Article1-785831.aspx

RIL buys stake in US Shale gas company
http://energybusiness.in/ril-acquires-stake-another-shale-gas-company/

It has many ventures

- RIL Pet Chem
- Oil, Gas and Refinery
- Retail (Includes Gold, Grocery, Shoes etc)
- Retail Outlets to sell Petrol
- Internet Telephony (4G)

RIL has the following unique problem:
What to do with so much cash?????

While other companies struggle with the following question:
Where to get cash from????

Isn't that an issue we all dream we should be in?

Will you buy RIL for the sheer cash size it has?

2 comments:

  1. Well if RIL is putting it in a FD, they are doing the shareholders a lot of dis-service. When the companies have such huge piles of cash, it means that there is a significant amount of free cash flow from operations. If they aren't able to find proper avenues to invest it (either CAPEX or acquisitions), they should return it to the shareholders in the form of a nice big dividend or bonus shares.

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  2. I would hope for a big Dividend or if nothing then a share buyback.

    But looks like the plans are to invest...awaiting turbulent times to cease...e.g buying a stake in terra power etc when market sentiments are so low

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