Reliance Industries Increases Ownership of East India Hotels

Reliance Industries, which is the largest private sector firm in India and is controlled by billionaire Mukesh Ambani, announced on Monday, August 30 that they have bought a 14.12% hold in East India Hotels. The hotel company operates the Oberoi and Trident brands and was paid $217.5 million for the stake purchase.

This purchase had already been a surprised for many market investors, but then Reliance said on Tuesday, August 31 that they increased their stake purchase by another 0.68% to 14.8%. Then there was a 1.15 million share turnover on the National Stock Exchange in two block transactions. After the announcement was made, shares in Reliance rose 0.3% to 939.3 rupees, while shares in East India Hotels increased 4.5% to 150.2 rupees.

Then on Thursday, it was reported by Zee Business channel that Reliance had plans to buy shares in Suzlon Energy, which is the country’s largest maker of wind turbines. However, the channel didn’t cite where they got this information.

Reliance spokesman Manoj Warrier has since denied the speculation, saying that there are no such plans. This wouldn’t have been surprising though, as the company has been buying stakes in companies to diversify from the gas and oil industry. Suzlon head of group public relations Nicholas Archer said that the company doesn’t comment on market rumors or speculations.

After the false report, shares in Suzlon surged a huge 14%, and the company wound up closing with a 10% gain to 51.3 rupees per share, which is the biggest rise they have seen in nearly a year. Reliance shares also rose due to the report 0.1% to 937.45 rupees.