The Hindu Business Line : RIL board meeting

THE stock market surge on Friday, when the Sensex crossed the 6,500-mark, is said to have been buoyed by a 3.5-per cent spurt by Reliance as the punters anticipated great things from the Monday's board meeting.

The market sentiment has, at its base, the feeling that a panacea to problems plaguing the Ambani business house may be forthcoming on December 27.

At the expense of dampening the market sentiment, a Reliance source said it was highly unlikely that anything dramatic would materialise at the board meeting, called primarily to discuss a buyback of RIL shares.

"The RIL board is unlikely to take any decision that will precipitate matters," he said.

Falling under the scope of `matters that could be precipitated' is the possibility of an open boardroom brawl. Although that may not happen, the chances of some contentious issues, pertaining to both Reliance Energy and Reliance Infocomm, jostling for discussion time with the directors are rated pretty high.

The markets are agog with discussions on what could be tabled for discussion at the December 27 board meeting. And the mood at the Reliance headquarters over the weekend is comparable to an army camp on the eve of a war.

Clearly, the central issue will be the price at which the buyback offer should be made for RIL shares. The company has maintained that it is a signal to the market, as the current price does not reflect the real worth of RIL. It is said that the "price would be attractive..But the question is, how attractive?

While the company refuses to engage in any speculation with merely a day to go for the board meeting, pundits point out that it is likely to be in the Rs 540-Rs 600 range.

"It depends on what the company really wants. If it is to remain a `hold signal', it will be at the lower range. On the other hand, if the company aggressively plans to buy back, it will be nearer the Rs 600-mark," an analyst said.

However, the arguments supporting the case for the stalemate continuing beyond Monday are quite persuasive. The chances of an acrimonious meeting have dissipated with both the sides opting to climb down rather than harden their stance. But there is a regular board meeting coming up in the second half of January and neither side would want to exhaust their ammunition at one go.

Thus, there could still be `long days ... and long hours ahead' for RIL, its shareholders and the media.

Although the board meeting is yet another attempt to amicably settle matters, a long-drawn corporate battle with implicit political overtones seems pretty much on cards.

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