Shares of Reliance Industries Ltd (RIL) turned ex-date for bonus issue in the ratio of 1:1 on Monday morning, leading to adjustments in its share price. The most-valued stock on stock exchanges opened at Rs 1,338, which was 49.61 per cent lower than Friday's closing price of Rs 2,655.45 for the stock. On adjusted basis, however, the stock was up 0.77 per cent.
Investors, who might be seeing a 50 per cent fall in RIL shares on their trading apps could, thus, be seeing the unadjusted RIL price.
To be sure, a bonus issue increases number of outstanding equity shares and reduces share price of the stock in proportion to number of bonus shares issued. It improves liquidity on the counter, but reduces free reserves and surplus of the company.
Monday's was the sixth bonus issue by RIL and the largest-ever in Indian history. RIL shares shed 10 per cent in the past one month. The scrip is up 2.53 per cent year-to-date against 9.87 per cent rise in the BSE Sensex during the same period.
Since its last bonus shares in 2017, the RIL scrip has delivered 266 per cent return and stood at Rs 2,655.45 on Friday against Rs 725.65 on September, 7, 2017, the ex-date. The preceding bonus issues were announced in 2009, 1997, 1983 and 1980.
Reliance Industries had in 2009 announced bonus shares in the 1:1 ratio, with the stock turning ex-date on November 26 that year. The 1997 bonus issue too was declared in the 1:1 ratio. The 1983 bonus shares were offered in the 6:10 ratio and 1980 in the 3:5 ratio. Besides this, RIL announced a total five rights issues, the last one in May 2020. In July 2023, Jio Financial Services Ltd was demerged.
Analysts are largely neutral-to-positive on Reliance shares. While RIL's core business is seen remaining muted with weak refining and petchem outlook in the near term, gas production is expected to stay stable at 28-30 mmscmd with a realisation of $10/MMBtu, PL Capital Institutional Equities said in a note.
"Jio’s ARPU rose 7 per cent QoQ to Rs 195 and should improve over the next 2 quarters too due to the tariff hike undertaken by the company. Retail is also likely to continue its steady performance. Our estimates are not factoring in numbers of new energy businesses where RIL is investing Rs 75000 crore. Demerger of Retail/ Jio Platforms and more clarity of new energy businesses will improve outlook," PL Capital said in the Diwali note.
JM Financial noted that RIL has plans to grow its revenue from Jio and retail businesses in the next 3-4 years. Additionally, its focus on green energy positions it well for the future, it said.