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RPL-RIL Merger Overview and Impact

RIL merged with RPL on April 1, 2001 to achieve operational and financial synergies through cost efficiencies. This merger of India's largest and second largest private companies by profits enabled them to adapt to changes in technology and deregulation in the hydrocarbon sector. As a result of the merger, RIL's capital increased by 32% and shareholder's of RPL received one RIL share for every 11 RPL shares. The combined company entered the Fortune 500 and earned profits of Rs. 4000 crores with a shareholder base of 3.5 million.

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Jitender Thakur
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19 views8 pages

RPL-RIL Merger Overview and Impact

RIL merged with RPL on April 1, 2001 to achieve operational and financial synergies through cost efficiencies. This merger of India's largest and second largest private companies by profits enabled them to adapt to changes in technology and deregulation in the hydrocarbon sector. As a result of the merger, RIL's capital increased by 32% and shareholder's of RPL received one RIL share for every 11 RPL shares. The combined company entered the Fortune 500 and earned profits of Rs. 4000 crores with a shareholder base of 3.5 million.

Uploaded by

Jitender Thakur
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

Merger of RPL with RIL

INTRODUCTION
RPL was merged with RIL on 1st April 2001. RIL was Indias Largest company in term of profits. RPL was also one of the largest private sector company in term of Sales. RPL was second to RIL in term of profits. It was a example of concentric amalgamation.

Why they Merged?


To increase operational and financial synergies in term of cost efficiencies. Continued progress in hydrocarbon sector reform and deregulation. Dismantling of the administered price mechanism in refining industry. Optimize fiscal incentive. Make a place in Fortune 500 The merger was to enable both the entities to adjust to the changes in the external environment specially in term of technology.

Share holder pattern


RILs capital was increased by 32% up to Rs. 1396crores Promoters' share holding come down from 44% to 34%. FII and GDR holding came down to 21% from 26%. Institutional and Banks holding were increased by 1% to 14%. Public holding increased to 19% from 17%. 7% stake was held by RIIHL. 5% was held by associate companies of RIL. Share holder of RPL got one share of RIL for every 11 shares.

Impacts of Merger
Entry in the Exclusive Fortune 500. Merged company earned the profit of Rs.4000 crores. Merged company made the family of 3.5million shareholders.

Some interested facts about merger


RIL paid interim divided of 47.5%. RPL paid an interim dividend of 5%. The merger lead to a 32 per cent increase in RIL's equity The annualized EPS went to Rs. 28.8 from Rs. 26 based on financial results announced by RIL and RPL.

Historic Graph

From 2001 to 2013

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