Jio in top 5: Only 4 largest listed companies in India more valuable than RIL’s telecom arm

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April 22, 2020 12:51 PM

The mega Rs 44,000-crore deal involving Mark Zuckerberg’s Facebook buying 10% equity stake in Mukesh Ambani’s Jio has made Reliance Industries’ telecom arm one of the top five, behind only the four largest listed companies in India by market capitalisation.

Facebook eyes on Mukesh Ambani’s Reliance Jio wants to buy equity stake worth a billion dollars in India’s homegrown telecom networkThe deal values Reliance Jio at a whopping Rs 4.62 lakh crore.

The mega Rs 44,000-crore deal involving Mark Zuckerberg’s Facebook buying 10% equity stake in Mukesh Ambani’s Jio has made Reliance Industries’ telecom arm one of the top five, behind only the four largest listed companies in India by market capitalisation. The deal values Reliance Jio at a whopping Rs 4.62 lakh crore. With such a massive valuation of Reliance Jio, only four listed companies can claim to be more valuable, namely, Reliance Industries Ltd (Jio’s parent firm); Tata group’s TCS; India’s largest private bank HDFC Bank; and FMCG giant Hindustan Unilever. Together, the social media behemoth and the telecom giant plan to empower the local mom & pop stores across the country.

Reliance Industries Limited (RIL) has been the dominant force in the Indian market, with a command over an array of sectors. With a market capitalization of Rs 7.83 lakh crore, the oil-to-telecom major is also one of the most cash-rich companies in the market. RIL is the sixth-largest oil company in the world and plans to become a zero-debt firm in the near future. RIL saw some competition coming from the second most valuable listed company in India earlier this year for the first spot but it did not budge.

The second spot is taken by Tata Group’s IT behemoth — Tata Consultancy Services (TCS). With a market capitalization of Rs 6.51 lakh crore, the company is way ahead of its competitor Infosys which has a market capitalization of Rs 2.69 lakh crore. TCS recently posted its quarterly results for the January-March quarter with revenue growing just 0.2% in the last quarter. Although TCS remains confident that it will bounce back strong and has assured staff of no lay-offs despite the slowdown in business.

TCS is followed by India’s largest private lender, HDFC Bank with a market capitalization of Rs 5.04 lakh crore. The private bank remains a safe harbor among the struggling banks in India with growing revenues and increasing advances. HDFC Bank posted an 18% growth in profits on-year basis. HDFC Bank, along with other lenders could face headwinds post the loan moratorium period but experts believe that HDFC Bank is the safest bets among India’s lenders.

Just behind HDFC Bank and slightly above Reliance Jio’s estimated valuation is Hindustan Unilever (HUL). The FMCG giant is one of the companies that has de-arrested itself from the benchmark indices and gained while the bloodbath continued on Dalal Street. From the middle of March, HUL share price has jumped over 27% on S&P BSE Sensex

Facebook’s investment into Reliance Jio is aimed at the social media company and the telecom giant connecting over 3 crore mom and pop stores across India. “In the very near future, JioMart — Jio’s digital new commerce platform — and WhatsApp will empower nearly 3 crore small Indian kirana shops to digitally transact with every customer in their neighbourhood,” RIL chairman Mukesh Ambani said in a video statement in the morning.

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