RIL subsidiary acquires Rhea, stock near all-time high

Reliance Industries’ subsidiary Reliance Brands Limited bought 100 per cent stake in Rhea Retail for a cash consideration of Rs. 203.46 crore. Reliance Brand is a trader and supplier of menswear and the company has acquired Rhea to foray into children and expectant mother clothing. On Monday, shares of Reliance Industries had hit 999.50 levels after a positive opening, but retreated with the markets to close flat to negative.

Rhea acquisition did not require regulatory approvals and is expected to add significant synergies. For FY17, Rhea posted 14.2 per cent growth in turnover at Rs. 200 crore and maintained the same amount in FY18. The said move would help Reliance Brands and thereby RIL in the long run.

It was the ninth consecutive day of uptick for RIL but witnessed profit booking in the afternoon session to close in red zone. Meanwhile, the stock breached its major resistance at 999.30 levels after a trendline breakout at 985 levels on Monday. The stock has formed a Rounding base and in case it sustains above 985, followed by 999 on closing basis, we hold 1,010 which is almost its all-time high followed by 1,055 as the next resistance level. However, if profit booking sustains for some more time, we hold 977-964, followed by 950 as the supports.