Oil-telecom-to-retail major Reliance Industries (RIL) was the only big gainer among Nifty constituents on May 8.
The index heavyweight shot up 76.7 percent from its March lows and is just 3.6 percent away from its record high of Rs 1,617.8 now, whereas the Nifty is up only 20 percent from its March lows.
The stock had fallen 45.5 percent in three months from its record high seen in December last year, but took only a month-and-a- half to recover almost all gains.
RIL is back near its Rs 10 lakh crore market capitalisation (m-cap). As per its May 8 closing price, the company’s m-cap stood at 9,90,088.02 crore.
All credit goes to the three back-to-back deals that took place in Jio Platforms, the 100 percent subsidiary of RIL. This is as per its deleveraging plan, or target of emerging net debt free on a net cash basis by March 2021.
On April 22, Facebook announced its decision to invest Rs 43,574 crore in Jio Platforms for a 9.99 percent stake.
Silver Lake on May 4 decided to invest Rs 5,655.75 crore for a 1.15 percent stake, at an equity value of Rs 4.90 lakh crore. On May 8, Vista Equity Partners said it would invest Rs 11,367 crore for a 2.32 percent equity stake.
Jio Platforms has now raised Rs 60,596.37 crore from leading technology investors in less than three weeks.
On April 30, RIL announced India’s biggest rights issue of Rs 53,125 crore at Rs 1,257 per share.
Overall experts remain bullish on the stock given its current and expected growth in telecom as well as digital business, and its strong deleveraging plan. They feel the deal with Facebook will boost Reliance Retail’s business and help RIL grow much faster in coming years.
Umesh Mehta, Head of Research, Samco Securities, advises investors to hold the stock till the rights issue and dividend record date to capitalise on the gains.
Last week, RIL informed the exchanges it expects to complete the capital raising programme totalling over Rs 1.04 lakh crore by Q1 FY21. “This includes investment by Facebook in Jio Platforms, the upcoming rights issue and the previous investment by British Petroleum in FY20.”
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