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Reliance Industries on Monday sold 2.58 crore (of its 18.4 crore) treasury shares for Rs 2,675 crore to Life Insurance Corporation of India.

This is the second tranche of treasury share sale by the company in four months, fortifying speculation that its acquisition of the bankrupt US-based LyondellBasel may happen soon.

In September, the company had raised Rs 3,188 crore from sale of treasury shares. Monday's sale to LIC was at Rs 1,035 a share. The value is lower than the day's closing price of RIL, at Rs 1,075. This is still lower than the valuation yielded in the previous tranche sale of treasury shares (at Rs 2,125 a share), which was prebonus and would now be valued at Rs 1,062.50.

The September 17 sale last year was at Rs 2,125 a share, which was higher than RIL's closing price of Rs 2,086.35 on that day. A senior LIC official confirmed the transaction. "We are looking at the purchase of RIL treasury shares as a long-term investment and this seems as a good buy," he said. LIC held 6.04 per cent stake Reliance Industries as of September 30.

Analysts said the company seems to be readying itself up for acquisition of LyondellBasel by getting funds.

Treasury stock refers to shares of a company that are not issued to the public, and are kept with the company's treasury to be used to create extra cash when needed. It may be recalled that 9.42 crore of RIL's treasury shares were until October 2008 grouped under "shares held by the promoter group". Currently, the shares are grouped under "public shareholding". RIL had then said that the various bodies corporate that held these shares had become subsidiaries of RIL.

More Stories on : Petroleum | Outlook | Stocks | Life Insurance | Reliance Industries Ltd

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