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Photo: Reuters
Photo: Reuters

RIL first Indian co to hit $200 bn m-cap

RIL has become India’s first company to cross the $200 bn market cap mark

Reliance Industries Ltd on Thursday became India’s first company to cross $200 billion in market value, with shares surging nearly 166% since mid-March, driven by its retail and telecom operations.

Shares of the Mukesh Ambani led company rose as much as 8.45% to a record 2,343.90 during the day, before closing at 2,314.65, up 7.10%, its highest single-day gain since 22 April. So far this year, RIL shares have gained 54.33%, beating benchmark indices.

RIL, India’s largest company, now has a market capitalization of 14.67 trillion, followed by Tata Consultancy Services ( 8.75 trillion), HDFC Bank ( 6 trillion), Hindustan Unilever Ltd ( 5.01 trillion), and Infosys ( 4 trillion).

Among global oil and gas companies, Saudi Aramco with a market cap of $1.91 trillion still retains the top spot, followed by RIL. Among global stocks, Apple Inc. is the world’s most-valued company with a market value of $2 trillion, followed by Saudi Aramco with $1.91 trillion, Amazon.com Inc ($1.58 trillion), Microsoft Corp. (1.53 trillion), and Alphabet Inc ($1.04 trillion).

Reliance Industries is one of the stocks most favoured by analysts due to its ability to reinvent business models while ensuring steady earnings growth. Currently, it has 24 buy ratings, seven hold and six sell ratings by analysts on Bloomberg.

Analysts at Morgan Stanley see capital allocation, execution and de-gearing as key to the next leg of stock outperformance as RIL capitalizes on India’s new energy, chemicals and retail market. “With industry consolidation picking up pace in telecom, retail, and global refining, we see RIL emerging stronger post covid and margins should surprise as pricing power rises," said Morgan Stanley in a report on 9 September.

On Wednesday, California-based private equity fund Silver Lake picked up a 1.75% stake in Reliance Retail Ventures for 7,500 crore, valuing the company at 4.21 trillion, or $57 billion. Mint reported that the retail arm is set to draw additional investments worth $5 billion from KKR and Co., Mubadala Investment Co. and Abu Dhabi Investment Authority.

“Over the last 2-3 months, there has been news flow about RIL being in talks with various strategic partners ...while any stake sale in RRL is positive news, we believe the markets would be more likely to bid up strategic investors than they would bid up PE investments," said JP Morgan in a note to its investors.

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