Reliance Industries' oil-to-chemical (O2C) business would spin-off into an independent 100 percent subsidiary, which will constitute the refining, petrochemical and fuel retailing businesses. Post the re-organisation, Reliance will retain 100 percent management control in the subsidiary.
In conversation with CNBC-TV18, market expert Prakash Diwan weighed in on how investors should look at the deal. First up, he said, "What they (RIL) have done is remarkably simple and now it's up to them to add more investments into the O2C business, make it richer and once approvals are done, [they would] look at the strategic investor, but I think it paves the way for a very significant monetizing of this asset."
On the stock front, he said, "Selling will stop in the stock and you could see more accumulation as news flows, because it is going to take some time; it's not something that's going to happen overnight. It will take at least 6-12 months for this reorganization to start bearing fruit. So I would wait for that, but the valuations would start inching up as progress is made on the actualizing of this business."
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