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Reliance Industries, the country’s largest private sector company, has sold a small stake in subsidiary Reliance Petroleum (RPL) in an effort to increase the company’s shareholder base.

Reliance Industries, which set up RPL as a separate company last year and did India’s biggest initial public offering (IPO) that mopped up Rs 8,200 crore, has said late that it has sold 4.01% of the company to institutional investors. The sale was done through the stock exchange over the past few days and fetched Rs 4,023 crore.

“The sale has further helped to broadbase the shareholding pattern of RPL. The number of shareholders of RPL has increased from 12 lakh at the time of the IPO to about 16 lakh,” RIL said in a statement. The sale reduces Reliance Industries’ stake in the company to about 70.99% from about 75%. US energy giant Chevron holds about 5% in the company. Incidentally, RPL shares inched up 0.3 to Rs 209.5. The shares have fallen 2.31% over the week but risen 17.07% over the past month. RPL shares had skyrocketed a few weeks ago on speculation that Chevron is increasing its stake. The American company has an option to raise its holding to about 29% soon after the commissioning of the refinery in late 2008.

RPL’s market cap today is bigger than the combined market cap of all the three public sector majors — IndianOil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation — though it has no fully functioning operating asset.

The firm’s 580,000 barrel per day refinery, the sixth largest in the world, is being built in the special economic zone in Jamnagar. A 0.9 million tonne polypropylene plant is also being commissioned near the refinery.

Reliance’s refinery was being commissioned to take advantage of oil shortages and rising gross refining margins, arising out of years of underinvestment in refining capacity across the world.

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