BP deal will allay market concerns about RIL: Religare Mutual Fund

How have you read the news in Reliance and the BP deal because now clearly the cloud of uncertainty on the stock price at least has been lifted, let’s just hope this pop perpetually continues?

Vetri Subramaniam: We own Reliance in several of our funds and the deal the way has come out will asperge a lot of the market concerns in terms of the technical issues that Reliance was facing in terms of extracting the gas because BP has all the right credentials and that is exactly the point that the company made as well that this is the partner who is very highly and well qualified in terms of handling the technical challenges of the company might be facing.

Secondly it underwrites the total value of the gas reserves because obviously BP must have done its own due diligence in terms of the fields on what they think the potential off take over a period of time could be. So as far as Reliance is concerned, in recent months, they have been in an environment where their refining business as well as the petchem business were seeing an upswing but the stock was being dogged by issues related to the gas exploration business and to the extent that this deal asperges a lot of the market concerns incrementally, it should be viewed positively by the markets.