- Oil-to-telecom business behemoth clocks 60,000% growth in three decades
Hyderabad: India’s largest corporate conglomerate Reliance Industries (RIL) on Thursday achieved a record market capitalisation of Rs 10 lakh crore. RIL has also set a new benchmark for the India Inc. RIL surpassed Rs 8-trillion mark in October and Rs 9-trillion mark in November. With $140.84-billion mcap, Mukesh Ambani-led company is ahead of BP Plc, which has mcap of $127.86 billion, and $131.51-bn total SA.
Oil-to-telecom major RIL touched its 52-week high of Rs 1,581.25 a share on the BSE. The stock gained nearly 40 per cent during last year, and the Nifty-50 index advanced over 13 per cent.
The business behemoth recorded an astonishing 60,000 per cent growth in the past 30 years. RIL share price grew 14,200 per cent since January 1991, and its valuation skyrocketed 60,742 per cent during the period. During the past three decades, the mcap of the company grew over 600 times. Recently, RIL created another record by making Rs 10,000 crore quarterly net profits in 2019.
After Reliance Industries Ltd, other four most valued firms in India are TCS, HDFC Bank, Hindustan Uniliver and HDFC. Among RIL’s big-ticket announcements of reaching net debt-free mark during the current fiscal of 2019-20 made it something special for investors. Recently, India’s richest businessman Mukesh Ambani, chairman of RIL, announced stake sale of 20 per cent in refining and petrochemical business to Saudi Aramco.
RIL is setting up a wholly-owned subsidiary called Jio Platforms Ltd (JPL) for all its digital platform initiatives. Mukesh Ambani announced a mega-investment plan of Rs 1.08 trillion of equity into the new unit JPL. RIL’s current equity investment in Jio is Rs 65,000 crore.
Reliance Industries has a good presence in fashion, lifestyle and consumer electronics. The company is leading in these sectors as well.
Reliance Retail has been successful even in grocery space also. RIL has already surpassed D-Mart with revenues being higher in FY19 and expansion pace being faster than D-Mart. Unlike most retailers, the rural market is helping RIL go for faster expansion. Reliance Retail has been successful in the smaller towns as the rural markets account for two-thirds of its retail business.
RIL growth trajectory is beyond comparison as mcap of major corporate leaders such as L&T, Tata Steel, CEAT, Ashok Leyland could grow below 200 times.
However, RIL stock closed at Rs 1,582, a net gain of Rs 12.15 or 0.77 per cent, on NSE. The mcap of RIL is at Rs 1,001,555.42 crore, while mcap of free float is at Rs 530,824.37 crore. RIL set a new 52-week high of Rs 1,584, and the 52-week low was Rs 1,055.35 recorded on December 11, 2018.
The stock rose 35 per cent in 2019 so far as against 10 per cent growth of Nifty-50. Technical charts indicate further upward movement of RIL shares to Rs 1,760.
Global rating agency Morgan Stanley in its latest report observed that high refinery margins and plan to hike telecom tariff, lower capex intensity, etc., are fuelling the market valuation of RIL. “The lower PE cycle, commencing gas production and sequential rise in earnings quality keeps us OW,” said Morgan Stanley.
RIL telecom arm Reliance Jio Infocomm has announced tariff hike from December onwards. This infused fresh buying interest in the stock said a market analyst.