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Now Reliance Retail to Venture into Pharma

October 20, 2006


Reliance Industries Limited subsidiary Reliance Retail India Ltd wants to setup a retail chain of Pharma and basic medical facilities throughout India, mostly villages and small cities.

After the division of business between the two brothers, Reliance ADAG had got control of two Reliance Hospitals and has the right to expand the same. However, Mukesh Ambani who tookover Reliance Life Sciences another division of RIL is talking of expansion using those two fronts to compete directly with Reliance ADAG.

With mere Rs2,700 crores quarterly profits, Mukesh Ambani is certainly thinking very big, investments to the tune of Rs50,000 crores(retail, SEZ, Pharma, Petroleum) but only time will tell in how many of these businesses he will be Numero Uno. I expect the RIL stock to underperform for the next few quarters and recommend a SELL at current levels.

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