Product details

The case examines the financial performance of two petroleum refineries - MRPL and RPL - established by the private sector in India during the mid-1990s. Though the shares of both these refineries were oversubscribed by investors during their public issue, the financial performance of these companies was very different during the period 1999-2002. The case studies the returns provided by the shares of both these companies and compare them with the overall stock market returns during the period 1996-2002. It analyses the systematic risk (Beta) involved when investing in the shares of these companies. This case is designed to enable students to: (1) analyse the financial performance of MRPL and RPL with a view to study the reasons behind the contrasting financial results; (2) determine the average returns and risk on the shares of MRPL and RPL during the period 1996-2002; (3) calculate the systematic risk (Beta) of MRPL and RPL for the period 1996-2002; (4) calculate the expected return and risk for a portfolio created by investing in RPL and MRPL shares in different proportions and determine the minimum variance portfolio. The case is targeted at MBA/PGDBA students and is intended to be part of the finance curriculum. The teaching note does not contain an analysis of the case.