EQUITIES

RIL share price hits all-time high; stock rallies 87% from March lows as firm sells more stake in Jio

RIL share price, RIL shares, Mukesh Ambani

Mukesh Ambani-led Reliance Industries share price scaled a new peak on BSE in Monday’s session as it gained 2.7 per cent to Rs 1,624. Last week, the conglomerate raised funds from Silver Lake and Abu Dhabi Investment Authority (ADIA). RIL shares have surged 87 per cent from its 52-week low of Rs 867.82 touched on March 23. RIL stock touched a new 52-week high level for the second straight session today. After roping in Abu Dhabi-based sovereign investor Mubadala, for a 1.85 per cent equity stake for Rs 9,093 crore, Mukesh Ambani has raised Rs 5,683.50 crore by a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) for a 1.16 per cent equity stake in Jio Platforms. Besides, US private equity firm Silver Lake also announced an additional investment of Rs 4,546.80 crore in the telecommunications arm of Reliance Industries Ltd.

In less than seven weeks, Reliance Industries has seen investors invest a total of Rs 97,885.65 crore for 21.06 per cent equity stake in Jio Platforms. “Although the company has witnessed subdued ARPU growth in 4QFY20, we believe this could be due to longer validity plans. RJio is expected to accrue the full benefit of the price hike in FY21,” Motilal Oswal said in its research report. The brokerage has revised its target price to Rs 1,743, an upside of over 10 per cent from Friday’s close, maintaining a ‘buy’ rating. “Additionally, the favorable competitive landscape in the Indian telecom sector should offer healthy incremental EBITDA either through ARPU hikes or market share gains,” the report added.

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With today’s gain in the stock, the market capitalisation of the stock stands at Rs 10,13,670 crore. The biggest investment so far has come from Mark Zuckerberg’s Facebook, investing Rs 43,574 crore in Jio Platforms for a 9.99% stake. Apart from Facebook, the other investments into Jio Platforms have come in from leading global technology investors including Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala and Abu Dhabi Investment Authority.

After receiving a robust response from the shareholders, RIL completed India’s biggest ever rights issue of Rs 53,124 crore. The allotment of the equity shares will take place this week, on or about June 10, 2020, and the listing of rights shares on bourses is likely to take place on June 12 under separate ISIN, according to the company’s press release.

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