Index heavyweight Reliance Industries has seen the fastest recovery among Nifty50 stocks from its March lows and became the top gainer given the tariff hikes effect and consistent increase in usage of data during lockdown due to rise in work from home activity.
The momentum picked up or gathered steam further especially after billionaire Mukesh Ambani-owned firm started announcing major deals with respect to Jio Platforms, the wholly owned subsidiary of Reliance Industries.
On April 22, Reliance struck a first deal with Facebook as it sold 9.99 percent stake in Jio Platforms to Facebook Inc for Rs 43,574 crore. And within less than six weeks, Jio Platforms has raised Rs 87,655.35 crore from leading global technology and growth investors including Silver Lake, Vista Equity Partners, General Atlantic, KKR and Mubadala.
“Investments by such marquee names in Jio platforms also helps increase our confidence in the company’s strategy to transform from a brick and mortar company into a digital play,” Jyoti Roy, DVP Equity Strategist at Angel Broking told Moneycontrol.
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The deal with Abu Dhabi-based sovereign investor Mubadala Investment Company was the latest amongst them, wherein Mubadala will invest Rs 9,093.60 crore in Jio Platforms against 1.85 percent equity stake.
As a result, today Reliance share price hit a fresh record high of Rs 1,617.70 and closed flat at Rs 1,580.60, the highest closing level since December 20 last year.
The stock rallied 80 percent from its March lows against 33 percent upside in the Nifty50, while since the announcement of first deal on April 22, it gained 29 percent.
Reliance Industries retained its tag – the most valued company on the Dalal Street – with having a market capitalisation of more than Rs 10 lakh crore.
With current market cap of Rs 10,68,806.51 crore, it added Rs 4,76,621.70 crore of wealth from its March lows and Rs 2,38,632 crore from April 22 when the first deal was signed.
Reliance has been a wealth creator for its shareholders and investors, especially after the beginning of telecom operations which expanded to digitalisation, the real game changer going ahead, experts feel.
“RIL has built up a dominant position in both the telecom and retail business where it is the marker leader. We believe that the telecom and retail business will be key growth drivers for the company over the next few years while the company’s foray into e-commerce through it’s JioMart platform will be a value creator for the shareholders in the long run,” Jyoti Roy said.
Angel Broking currently has a buy rating on the stock with a SOTP based target price of Rs 1,748.
Reliance has been well ahead of its target to achieve the debt reduction plan by March 31, 2021 and the recently launched mega rights issue of Rs 53,124 crore was one its part of debt reduction plan.
The rights issue, which closed on June 3, was subscribed 1.59 times and received Rs 84,000 crore of subscription.
Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes Moneycontrol.
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