- Mukesh Ambani-led RIL today became the first Indian company to hit the market cap milestone of approximately 10 lakh crores.
Mukesh Ambani-led Reliance Industries Ltd (RIL) today became the first Indian company to hit the market cap milestone of approximately 10 lakh crore after its shares rose to a record high of approximately 1,581 per unit. The global markets are hitting a new high today as well. RIL shares today grew to about 1,581 by 0.70 percent. Since the beginning of this year, RIL shares have outperformed the market, rising by almost 40%.
It was also last month when RIL became the first Indian firm to cross the landmark market cap mark of about 9 lakh crore.
Here are important things to know:
- RIL’s telecom subsidiary Jio recently announced it will raise tariffs shortly after other telecom operators revealed price hike plans.
- Sanjiv Bhasin, IIFL Securities Director, says RIL shares remain positive. RIL is expected to see strong growth in consumer-centered businesses like Jio, telecom, and other technology businesses, he says.
- Jio’s price increase would help his average revenue per user in the immediate term, he said. Mr. Bhasin on Bharti Airtel, too, remains optimistic.
- Reliance Jio, with a user base of approximately 35 crore users, posted a stand-alone profit of some 990 crores for the quarter ended September 30 on revenue of some 12,354 crores.
- RIL announced last month that it will set up a holding company for its digital services group, including telecommunications, which could make way for a strategic investor to join.
- In the new company, RIL will infuse more than 1 lakh crore in the form of so-called potentially convertible preferential shares. Following the infusion of equity, Reliance Jio will transfer liabilities over 1 lakh crore to a parent-subsidiary, making Jio nearly debt-free by March 31, 2020, excluding liabilities related to airwave.
- Earlier this year, Mukesh Ambani announced plans to reduce the company’s net debt to zero in 18 months utilizing measures including a stake in the oil-to-chemicals business in Saudi Arabia Aramco.
- In August, RIL also signed an agreement that gives the major European oil a 49 percent stake in the fuel retail business of the Indian conglomerate.
- Probably receiving some 1.1 lakh crore from Aramco and BP in FY21, RIL is on track to reach its zero net debt target, says Edelweiss Securities, which has a stock purchase rating at a target price of 1.716/share.
- RIL operates the world’s largest oil refining complex in Jamnagar, Gujarat, which can process crude low-quality fuels and turn them into higher-grade fuels, partly shielding them from price volatility.
- BofAML said in a report last month that RIL could become the first Indian company to achieve a $200 billion market capitalization on the back of its new business venture and fixed broadband business.
RIL’s telecom/digital sector restructuring focuses on asset monetization and debt reduction, said Morgan Stanley. Oil-to-telecom conglomerate RIL reported an increase in net profit of 18.3 percent year-on-year to a record of 11,262 crores, backed by a strong performance from retail and digital services companies. RIL may become the first Indian firm to reach a market capitalization of $200 billion over the next two years, according to Bank of America Merrill Lynch.