Reliance Petroleum limited

Reliance is expanding building up the largest refinery complex of the world at Jamnagar. In 2 years the refining should be up in full swing. I believe that investing in the company would be a wise decision. I today purchased 20k worth of shares myself.

Reliance invested in the company at 60/- a year ago. (and the IPO was also at the same price) So 65 is actually a good price.
With the crude price sky rocketing, the only way to keep the margins high is to process the crudest oil. The oil which no other refinery will accept is always available at throw away prices. Employing the latest technologies and due to the colossal size RPL has an undue advantage in processing such oil.

As the oil reserves gets depleted and prices rise, more and more poor quality crude wells would be drilled and they need refineries like Reliance to process.

Reliance has a good track record of thinking big, executing on schedule. They do shady deals, but they are known to share the profits with the shareholders.

1)India is completely dependent on imports for majority of its oil needs.
2)The pricing on Kerosene, LPG and the cross-subsidies might make private refineries to look for export market (Read higher transport cost)
3)There is a 2 years of waiting period before revenue starts coming.
4)Stock Market is at Peak. So have a long patience (Read next summer)


Indian Bank IPO

Chennai based Indian bank plans to have an IPO in order to sell 8,59,50,000 shares and raise about 800-900 crore. The IPO is expected to hit between 1 to 2nd week of January and is being floated to meet the Basel-II norms of capital adequacy.

Salient Points:
1) It has a infrastructure sharing agreement with Oriental Bank of Commerce and Mumbai-based Corporation Bank.
2) The bank did a business of 70,000 crore each year (a 17% growth over last year).
3) The profits rose last year by 38%, primarily due to 25% increase its credit and a 17% increase in deposits.
4) The bank has an authorized capital of 1,500cr, paid up capital of 343 crore, preferential capital of 400 cr, and has over 2,000 crore in reserves.
5) The Net interest margin of the bank is a healthy figure of 3.57% and its NPA is less than 0.45%.

More updates awaited when I get my hand of the detailed balance sheet and the price band of the IPO is finalized.