RIL hits new high on closing deals with 4 investors; m-cap above Rs 12 trn

Shares of Reliance Industries surged 3.21 per cent to a new lifetime high of Rs 1,938.80 on the BSE on Monday after the company closed deals with four investors to sell a minority stake in Jio Platforms, receiving a total of over Rs 30,062 crore in the process. 

That apart, the Mukesh Ambani - controlled company also announced Rs 730 crore investment by Qualcomm Ventures in the digital arm over the weeked.

In a regulatory filing on Saturday, Reliance said it has closed the sale of 6.13 per cent stake in Jio Platforms with L Catterton, The Public Investment Fund, Silver Lake and General Atlantic, receiving over Rs 30,062 crore in the process. Interstellar Platform Holdings Pte Ltd of L Catterton paid Rs 1,894.50 crore for a 0.39 per cent stake in Jio Platforms. The Public Investment Fund paid Rs 11,367 crore for a 2.32 per cent stake while Silver Lake units -- SLP Redwood Holdings Pte Ltd and SLP Redwood Co-Invest (DE), L.P. -- have bought 2.08 per cent stake for Rs 10,202.55 crore.

"We hereby inform that, after receipt of all requisite approvals, Jio Platforms Limited, a subsidiary of the company, received the subscription amounts" from the four investors," it said. READ THE FILING HERE

Qualcomm buys stake

Moreover, the company further announced on Sunday that it has secured Rs 730 crore from wireless technology leader Qualcomm by selling a small stake in Jio Platforms. "Qualcomm Ventures' investment will translate into 0.15 per cent equity stake in Jio Platforms on a fully diluted basis," the company said in a statement.

Altogether, Reliance has sold 25.24 per cent stake in Jio Platforms Ltd and raised over Rs 1.18 trillion in the process.

Proceeds from the stake sales in Jio Platforms along with the Rs 53,124 crore raised in a rights issue in June and from sale of a 49 per cent stake in its fuel retail network to BP last summer for Rs 7,000 crore, will help the company become net debt-free, Reliance announced last month, once the promised funds come in (75 per cent of the funds from the rights issue will come in next year). As of March, Reliance had a net-debt of over Rs 1.6 trillion.

At 9:38 AM, the stock was trading at 2.89 per cent at Rs 1,932.85 as compared to 1.04 per cent gain in the S&P BSE Sensex. Around 73.4 lakh shares have changed hands on the NSE and BSE combined so far. The market capitalisation (m-cap) breached the Rs 12 trillion mark in the process.

Board meeting

In this backdrop, Reliance Industries will hold its 43rd annual general meeting (AGM) on July 15 via videoconfrencing. Analysts expect chairman Mukesh Ambani to give further details about the e-commerce venture JioMart, videoconfrencing app, JioMeet, and details of the $15-billion deal with Saudi Aramco, among other things.

Motilal Oswal, which has a 'BUY' rating on the stock, raised its target price from earlier Rs 1,743 to Rs 2,000.

"RIL has attained a dominant position in both digital services and organized retailing. We believe the focus on the ‘oil-to-chemicals’ project would lead to huge potential upside from the standalone business as well. Considering the company would become a net debt free, we have raised the multiple for refining and petrochemical from 6x to 7.5x. Consumption of petroleum products also appears to be normalizing. Making adjustments for the same, our valuation for refining and petrochemical increases from Rs 617/share to Rs 791/share," the brokerage said in a note.

"Valuing the standalone refining and petrochemical segments at 7.5x FY22E EBITDA and adding equity valuation of Rs 885/share for Jio and Rs 500/share for retail, we raise our target price from Rs 1,743/share to Rs 2,000/share. We reiterate RIL as one of our top picks," it said.

Analysts at Credit Suisse maintained, however, their 'Neutral' rating on the stock while increasing 12-month target price from Rs 1,375 to Rs 1,690. The brokerage said the next triggers for the stock would be: more clarity on new commerce initiative and Aramco O2C deal. Among key risks for the stock, the brokerage listed: slow traction in Jio's non-wireless verticals, energy cycle stays weak, and positive surprise in new commerce retail with significant onboarding of kirana stores.

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