RPL and RIL merger

Yet again, for the second time merger of RPL and RIL is on the cards. In the last board meeting amalgamation of the two companies was announced. However, the ratio in which the shares will be converted is yet to be seen.

In 2002, merger of the two companies RPL and RIL had happened. This was good for the shareholders of both the companies with RIL shareholders benefiting the most. This time as well the same is expected. Earlier RPL has started its first refinery under the name of RPL and when it became operational it got merged with RIL. Then its second refinery was being built under the name of RPL. Now its time when this refinery is about to be operational. So the merger again.

The merger couldnt have been timed any better. This merger will bring two companies together, one of which has good potential to bring in high cash flow and the other having huge reserves for the investment.

Post merger the swap ratio could be anywhere between 1 share of RIL for very 15 or 24 shares of RPL. This would prove profitable to RIL shareholders rather than RPL.

So should we buy these shares next week. Buying RIL early next week would be profitable but its better to avoid RPL.

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