RIL’s market cap hits ₹10 lakh crore, a first for an Indian company: 10 points
- The Sensex also hit a new high today
- RIL shares have sharply outperformed broader markets this year
Mukesh Ambani-led Reliance Industries Ltd (RIL) today became the first Indian company to hit the ₹10 lakh crore milestone in market capitalisation, after its shares rose to a record high of ₹1,584 apiece. The broader markets also hit a new high today. RIL shares settled 0.65% higher at ₹1579.95, giving it a market cap of ₹10.01 lakh crore. RIL shares have outperformed the market since the start of this year, surging nearly 40%.
Here are 10 things to know:
1) Recently, RIL's telecom unit Jio announced that it will increase tariffs soon after other telecom operators announced plans for a price hike.
2) Sanjiv Bhasin, director of IIFL Securities, says remains positive on RIL shares. RIL’s consumer-centric businesses like Jio, retail and other technology businesses are expected to see strong growth, he says.
3) In the immediate term, a price increase by Jio would benefit its average revenue per user, he added. Mr Bhasin also remains positive on Bharti Airtel.
4) Reliance Jio, which has a user base of about 35 crore users, had posted a stand-alone profit of ₹990 crore for the quarter ended September 30 on revenue of ₹12,354 crore.
5) Last month, RIL announced that it will set up a holding company for its digital services business, including telecom, potentially making way for the entry of a strategic investor.
6) RIL will infuse over ₹1 lakh crore in the new company in the form of so-called optionally-convertible preference shares. Following the equity infusion, Reliance Jio will transfer liabilities worth over 1 lakh crore to the subsidiary of the parent, turning Jio almost debt free by March 31, 2020, excluding airwave-related liabilities.
7) Mukesh Ambani had earlier this year announced plans to cut RIL's net debt to zero in 18 months through measures, including a stake sale in the oil-to-chemicals business to Saudi Aramco. RIL had in August also announced a deal that gives the European oil major a 49% stake in the Indian conglomerate’s fuel retail business.
8) With likely receipt of ₹1.1 lakh crore from Aramco and BP in FY21, RIL is on course to achieve its target of zero net debt, says Edelweiss Securities, which has a buy rating on the stock with target price of ₹1,716/share.
9) RIL operates the world’s biggest oil-refining complex in Jamnagar, Gujarat, which can process low-quality crude and turn it into higher-grade fuels, partly protecting it from volatility in prices.
10) Last month, BofAML in a report said that RIL can become the first Indian company to achieve a market capitalisation of $200 billion on the back of its new commerce venture and fixed broadband business. (With Agency Inputs)
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