RIL Right Issue Detail

Reliance Industries Limited – India’s first Rs. 10 Lakh Crore Company

On November 28, 2019 Reliance Industries (RIL) has made history on stock markets when the company becomes the first company among listed entities to reach the market capitalisation of Rs. 10 Lakh Crore.

Let’s have a brief outlook on the company :

History of Reliance Industries

The company was founded by Dhirubhai Ambani in 1966 as polyester firm. Reliance later entered into financial services, petroleum refining, power sector. By 2002 Reliance had grown upto US $15 billion. In 2002, Reliance enters the Infocomm business and brigs revolution of mobile phones in India. After Dhirubhai Ambani demises in 2002, two brothers Anil & Mukesh Ambani split the business in 2005. Anil Ambani got responsibility of Reliance communications, Reliance Energy and Reliance Capital.

In 2004 Reliance Industries became the first Indian Private sector org to be listed in fortune Global 500 List.

In 2017 Reliance becomes the first company to become india’s first Indian Company to cross Rs. 6 lakh Crore Market Capitalisation making it grown from a small startup to India’s biggest company in just 4 decades.

If one invested Rs 10,000 in Reliance during IPO in 1977, those shares would have currently valued at Rs 2.1 Cr.

Market Capitalisation

On November 28, 2019 the company Reliance Industries Market Capitalisation has hit a new record of Rs. 10 Lakh Crore or $140 billion when the stock of the company crosses Rs. 1580 making it India’s first company to hit this mark with an P/E of 27.15

TCS is the company after Reliance Industries in terms of Market Cap, the market capitalisation of TCS is Rs. 7.7 Lakh Crore as on November 29, 2019.

The stock has been one of biggest gainers among the top 10 Nifty companies, rising 10 percent in the last one month, 24 percent in three months and 40 percent in last one year.

Reason for Bounce

The major reason for stock rally was its debt reduction plan and likely hike in Reliance jio’s tarrifs.

Last month, Reliance industries had approved the formation of a wholly-owned subsidiary for Digital Platform initiatives and have said Reliance Jio would become virtually net debt free company by FY20 end.

Reliance Jio has already become the field player for the company and adding around 10 million new customers each month. On November 19, 2019 Reliance Jio said it would raise the tariffs and data charges in the next few weeks.

Financial Review of Reliance Industries Limited (RIL)

Fig ‘Rs. in Cr.’

Mar’2019

Mar’2018

Mar’2017

Total Assets        5,62,517        4,11,482        3,89,616
Profit Before Tax            47,367            45,725            40,777
Profit After Tax            35,163            33,612            31,425
EPS                    55                    53                    97

Brokerage’s View on this Stock

Furthermore, Analysts believe RIL’s telecom arm Reliance Jio is set to further drive the stock’s out performance.

Target Price of RIL (Reliance Industries Limited)

Morgon Stanley has its overweight call on RIL with an Target of Rs. 2000/- due to higher refinery margins, potential telecom tariff hike, bottoming P/E cycle, kickstart of gas production, lower capex and ongoing deleveraging.

Sharekhan has also maintained a Buy rating on the stock with a Target of Rs. 1785/-.

Data from Reuters Eikon showed analysts are most bullish on RIL in at least four months. Currently, RIL has 16 ‘strong buy’, 10 ‘buy’, five ‘hold or neutral’, one ‘sell’ and one ‘strong sell’ ratings.

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