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Chairman of JM Morgan Stanley, Nimesh Kampani expects RPL to stabilise between Rs 90 and 100.
He further adds that Chevron is likely to increase their stake in RPL to around 29% from the current 5%.
Excerpts from CNBC-TV18's exclusive interview with Nimesh Kampani:
It was a fantastic listing and we were wondering about the kind of institutional appetite that will kick in, now that the stock has cooled off a bit?
Reliance Petroleum started with Rs 100 and hopefully it will stabilise between Rs 90-Rs 100. There was tremendous response. There are also people waiting to see how they can buy and average their investments. I think the stock should stabilise, it is only the opening and now the middle order batsman has to come.
What is the sense that you got when you spoke to a lot of institutional investors? Did they comfortably own the stock at Rs 90-100?
The institutional investors are confident because of two things. One, is that financing has got tied up and second, Chevron has come in as a co-promoter. Third, Chevron will take another 24% equity because they have only taken 5% equity at the moment and so overall they will have 29% equity.
So from that point of view, investors are feeling confident and at the same time they have got substantial stocks at Rs 60/share and those who have taken the stock pre-IPO are locked in for a period of one year before they can sell their shares. Overall the demand has been good and I expect it to settle between Rs 90-Rs 100.
On a more long-term basis would it be fair to compare a Reliance Petro with a Reliance Industries because the points have been made about Reliance Petro's refineries and also the kind of value added products it will be making?
I don't thing we can compare them both because Reliance Industries has different businesses. Apart from refinery; they are into oil and gas, in polyester. They have a diversified portfolio. There are some investors who think they can buy Reliance Industries and they still have a play on Reliance Petroleum.
While there are others who only want to take a play on refining and those investors can buy only Reliance Petroleum. So it all depends on what the investor wants, whether he wants to play oil and gas or pure refining.
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