RIL share price hits all-time high; market cap inches closer to Rs 10 lakh crore mark

Reliance Industries share price hit a fresh all-time high in early trade today bringing the market cap of the conglomerate closer to the record Rs 10 lakh crore mark, a first for an Indian company. Reliance Industries  Ltd (RIL) share price rose 0.98% or 15.3 points to hit a record high of Rs 1, 576 compared to the previous close of Rs 1560.70 on BSE. That brought the market capitalisation of the Mukesh Ambani led-firm to Rs 9.95 lakh crore, Rs 5,000 crore short of the record Rs 10 lakh crore market cap mark.

RIL share price has gained over 2% in last three days. RIL share price is trading higher than its 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The large cap stock has gained 39.4% since the beginning of this year and risen 41% during the last one year. In the last one month, the stock has gained 9.50% on BSE.

Also read: Reliance Industries' deal with Aramco: Mukesh Ambani wants chemicals to dominate Jamnagar refinery output

On BSE, 84519 shares changed hands in 4226 trades amounting to turnover of Rs 13.35 crore. On November 19, RIL became the first Indian firm to cross the Rs 9.5 lakh crore market capitalisation mark. The rise in RIL share price came after Vodafone India and Bharti Airtel announced a tariff hike from December.

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Earlier in October, Mumbai-headquartered Reliance Industries hit a new milestone as the first Indian company to cross the staggering Rs 9 lakh crore market-cap mark. The stock has risen 161 points or 11.37% since the firm announced its quarterly earnings on October 18, 2019. The firm has seen a series of stock upgrades after  earnings of the firm were announced.

Also read: Reliance Industries overtakes BP Plc to become world's 6th largest oil company

On November 20, Credit Suisse raised its target price to Rs 1,400 from Rs 1,210 citing likely tariff increase by Reliance Jio which could bring annual cash flow of $1.5 billion. This cash flow will help the firm achieve zero net debt target by FY21, the brokerage said. It raised its FY20/21/22 earnings per share estimates by 15%, 12% and 20%, respectively.

On November 5, UBS reiterated its 'Buy' call for RIL stock and increased the price target from  Rs 1,500 to  Rs 1,750. UBS said plans to re-organise its investment in Reliance Jio Infocomm Ltd (RJIL) to make Jio a net debt-free company by the end of the current fiscal could unlock significant value for the conglomerate.

In October end, Reliance Industries said it would set up a new unit to bring all its digital initiatives and apps under a single entity, and infuse Rs 1.08 lakh crore equity into this new unit.

Also read: RIL, Airtel expected to bid for Anil Ambani-led RCom's assets

The new structure will also create the largest digital services platform company in India. The new entity will continue to work on technologies in areas such as healthcare and education, while also looking at next-gen competencies such as artificial intelligence, Blockchain, virtual and augmented reality, among others.

On October 16, Brokerage Bank of America Merrill Lynch pegged market cap of RIL at $200 billion in 24 months. Mukesh Ambani-led Reliance Industries is likely to become first Indian company to reach $200 billion market cap in 24 months backed by its new commerce venture and fixed broadband business, Bank of America Merrill Lynch (BofA-ML) said in a report.

The stock is likely to receive additional boost with several initiatives Reliance Industries has undertaken. New commerce initiative of empowering Kiranas in unorganised retail market by offering MPoS (mobile point-of-sale), entry into SME enterprise space with Microsoft, Jio's fiber broadband business and digital initiatives such as advertising could push the market capitalisation of the conglomerate to $200 billion, the brokerage said.

"We think the market is giving little credit to these initiatives given limited visibility," BofA-ML said. "We expect near-term momentum to be strong."

By Aseem Thapliyal