Reliance Industries today sold 2,675 cr. of its own stock at an average price of 1,035 per share, to fund . LiveMint says the money will most likely go to fund the LyondellBasell acquisition ($10-12 billion, or 45-55K cr).

Treasury stock is when a company owns it’s own shares – not usually permitted, but in this case, Reliance got them when it merged with Reliance Petroleum I in 2002 (as opposed to RPL II in 2009). Investors remember that Reliance sold a good chunk of what it owned of the RPL II shares at 214 or so, a few weeks before the big crash in 2008. That shows they knew a little bit of timing. Of course, if the RIL management was that smart, they would have sold the treasury stock too at those rates – when RIL quoted at a bonus adjusted price of Rs. 1650.

It’s tough to read anything into treasury sales. If anything it’s good to have cash, one would think, especially when they have quite a lot of debt in a potentially rising-interest-rate scenario.

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