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Reliance Industries Chairman Mukesh Ambani. (Photo: Reuters/Denis Balibouse)
Reliance Industries Chairman Mukesh Ambani. (Photo: Reuters/Denis Balibouse)

Reliance Industries becomes India's first firm to hit 11 trillion market cap

  • RIL's stock price rallied as the Mukesh Ambani-led firm, earlier today, said it was now net-debt free
  • The firm raised 1.15 trillion via 24.71% stake sale in its digital services arm, Jio Platforms, to 10 global investors

Reliance Industries Ltd (RIL) on Friday became the first Indian company to reach a market capitalisation of 11 trillion as its shares doubled since mid-March. The stock rallied to hit a record high of 1,738.95 on the BSE, up about 5% from Thursday's close.

The stock price jumped as the Mukesh Ambani-led firm, earlier today, said it was now net-debt free owing to fundraising to the tune of 1.15 trillion through the sale of 24.71% stake in its digital services arm, Jio Platforms Ltd (JPL), to 10 global investors.

RIL also raised 53,124 crore through rights issue. Its net debt was at 1.61 trillion as of 31 March, 2020.

“While RIL has not mentioned how much stake it would like to divest in JPL, in our view, the major stake sale cycle in JPL is likely done for now" said brokerage firm, JP Morgan, in a report.

“With little earnings momentum in the near term and the key de-leveraging news flow out of the way, we would expect the stock to consolidate in the near term: While Refining and Petchem should recover from 1Q lows, the environment should remain subdued for the next 2-3 quarters. News flow on de-leveraging would remain key in the near term", the JP Morgan report said.

Recently, Bloomberg had reported that RIL plans to buy a controlling stake in Kishore Biyani's Future Group, which JP Morgan finds surprising given RIL significant presence in retail.

“We find RIL well positioned to fund this reported transaction either via cash or debt given its recently improved balance sheet, and would take opportunity to acquire good assets/brands which otherwise would not be available for sale" said brokerage firm Bank of America in its report.

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