The shares of Reliance Industries nearly halved from yesterday’s closing price of Rs 1,644 on BSE and opened at Rs 824 this morning after the shares went ex-bonus.
Reliance Industries shares rose by more than 1% and hit a new high of Rs 832.7 on BSE this morning as the shares went ex-bonus today. The company’s chairman Mukesh Ambani had announced a 1:1 bonus issue in the 40th AGM of Reliance Industries this July. The shares nearly halved from yesterday’s closing price of Rs 1,644 on BSE and opened at Rs 824 this morning after the development.
Record date for the bonus issue is fixed on September 9, 2017, which implies that investors having shares of Reliance Industries in their demat account on September 9 will receive the bonus shares. The shares have gained consecutively for the last seven trading sessions. Reliance Industries shares have returned 52% in the year so far. In comparison the Sensex has returned just 18% since January. Shares of Reliance Industries have risen more than 7% since it announced better-than-expected June quarter earnings in July. In comparison, the Nifty 50 index has moved up 0.4% during the same period.
The company had earlier announced a bonus issue of 1:1 in 2009, more than eight years back. The bonus issue comes at a time when the company’s capex cycle is approaching its end. Mukesh Ambani had said in the AGM while announcing the bonus issue that a 3.3 lakh crore capital expenditure cycle is now coming to an end, which will start generating free cash flows in the coming months. Out of this 3.3 lakh crores, 1.3 lakh cores was earmarked for Petrochemicals segment.
Jal Irani, Senior VP at Edelweiss Capital Services, had also recently remarked that Reliance Industries is expected benefit a lot in the near future as the company’s projects under commissioning will significantly add to free cash flows. “There are $40 billion worth of projects in commissioning phase, which doubles their (RIL’s) productive assets,” Irani said, adding, “We forecast RIL’s free cash flows to rocket from next year as the quarterly capex trend is plummeting.” Reliance industries now has a market capitalisation of more than Rs. 5.34 lakh crore, making it the company with the largest market capitlaisation.