Reports that CLSA has downgraded the stock to under-perform seemed to have affected the sentiment for the stock.
However, brokers said as the stock ran up quite sharply in recent times it witnessed some profit booking. They also attribute the downfall to the short positions added in F&O segment on Monday and on early Tuesday. “After quadrupling since our initiation in April-07, RPL now trades at an asset value of $4,129/complex-bpd – 2.4x that of its peers in the US and a 50-70 per cent premium to even the most expensive refinery new-builds quotes.
“While such a premium recognises its superior earnings potential because of lower capital costs and taxes, even on earnings-based multiples RPL appears fully priced relative to its peer group at 10.9x P/CE and tax-benefit-adjusted 9.9 EV/EBITDA calculated on our upgraded top-of-consensus FY10 estimate. Risk reward is unfavourable,” said CLSA in its latest Barrels and Bubbles report.
3 comments:
hi,im a regular reader of you blog and wanted to highlight the wrong doings of RPL. its not fair that the big sharks eat up small fishes like us. the recent event is a good example. i think we shld make investors aware of such activities.
RPL under SEBI Scanner.. the drop from 290 to 195 has been completely operated. thats the news all over.. check this link of financial express and live mint
http://www.financialexpress.com/news/Smart-operators-in-RPL-futures-make-a-cool-Rs-1-000-cr/244312/
Between November 1 and November 6, 2007, a particular group made short sales of 10crore shares of Reliance Petroleum in the futures segment of National Stock Exchange costing Rs.3,000 crores approximately. they made a cool Rs 1,000 crores in less than a month, because the Reliance Petroleum shares have now crashed from Rs.295 to Rs 195 per share!. These guys have made Rs.100 per share.
isnt it ironic that someone knew that RIL was going to sell a huge quantity of shares and the prices were bound to come down?
My 2nd question is Who financed these traders for their margins? Where has this profit gone? and who bore the loss???
Its innocent small investors who bought Reliance Petroleum shares at the high prices, not knowing that this unholy alliance was indulging in insider trading and making illegal profits while Mukesh Ambani's own company RIL was selling shares without disclosing this to investors!!
I very much agree with you
Yep the ordinary retails investors always lose out. I think SEBI should take strict action in such cases to protect the interest of ordinary investers
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