- Reliance Industries (RIL) reached a fresh record high of Rs 1,847.7, up 3.4 percent on Monday’s BSE, and hits Rs 12 Lakh crore market cap
Reliance Industries(RIL) reached a fresh record high of Rs 1,847.7, up 3.4 percent on Monday’s BSE, and hits Rs 12 Lakh crore market cap after the company bagged 12th foreign investment for its digital arm Jio Platforms on Friday. The oil-to-telecom behemoth announced a 0.39 percent stake sale to Intel Capital for Rs 1,894.50 crore in its digital services subsidiary.
Intel Capital is a branch of Intel, the world’s largest manufacturer of semiconductors. It joins 11 other investors, including sovereign funds and private equity firms that now own 25.09 percent of Jio Platforms collectively.
Jio has raised Rs 1.17 lakh crore through stake sales in the past two months to strengthen its digital services business and accelerate its debt reduction goals.
The stock traded 3.27 percent higher at 1:20 am on the BSE at Rs 1.84595. Till the time of writing this report, a combined 15.20 million shares had changed hands on the NSE and BSE counters. On top of that, its market capitalization (m-cap) hit a fresh Rs 11,70,222.37 crore, BSE data shows. Combine it with m-cap Partly-Paid shares in Reliance Industries, whose m-cap stood at Rs 40,005.09 crore, the overall m-cap crossed Rs 12 trillion marks.
The company crossed the Rs 11 lakh crore market-cap-mark on June 19 when it revealed it had become net-debt-free well in advance of its March 2021 deadline.
Along with the petro-retail JV’s stake sale to BP, the total fundraising exceeds Rs 1.75 lakh crore. RIL has been net debt-free with these investments. The net-debt of the company was Rs 161,035 crore, like Mukesh Ambani, chairman, RIL had said in a statement on March 31, 2020.
“We have received significant interest in our consumer businesses, Jio and Reliance Retail, from strategic and financial investors. In the next five years we will move towards listing both of these companies, “he had said.
After petrochemicals and refining, digital services accounted for just 10 percent of the company’s operating profit in FY18 and we’re the third largest segment in FY20. HSBC analysts, however, projected it to contribute 36 percent of RIL ‘s consolidated operating profit to FY21, the highest in all segments. The next round of value unlocking in RIL is expected to drive both the digital and, more importantly, the retail sector.
For those at Morgan Stanley, Jio Platforms asset monetization along with the $7 billion issues of rights should reduce net debt for RIL by more than half.
“Multiple catalysts are in play with faster deleveraging than expected, improving demand and margin outlook on refining and chemicals, 23 percent CAGR top-quartile earnings over F20-23, and multiple-supporting digitization,” the brokerage said in a report issued on July 4.