New Delhi: The stock of Reliance industries remained inactive this week since investors were observing news that its consumer division could acquire majority shares in Udhaiyamas Agro foods. Even though there were talks about this big deal, big changes were not observed in the stock price.
Analysts believe the stability is an indication that investors have confidence in the overall business strength of Reliance. The acquisition of a local food brand is only one of the components of the growth strategy that the company has in consumer products.
Dependency has been growing in consumer goods other than oil and gas such as drinks, packaged foods, and personal care products. The acquisition would enable the firm to compete with large brands of FMCG.
The confidence that investors have regarding Reliance is also based on the fact that the company has good financial support and extensive distribution network. This implies that it is able to build brands fast in India and target even smaller towns.
