Reliance Industries shares surged Monday morning to a new 9-year high, extending last Friday’s stellar gains, after the company said it had 72 million ‘Prime’ subscribers on its Jio telecom network, much more than the 50 million as was widely expected.
Reliance Industries shares surged Monday morning to hit a new nine-year high, extending last Friday’s stellar gains, after the company said it had 72 million ‘Prime’ subscribers on its Jio telecom network, much more than the 50 million as was widely expected. RIL’s shares hit Rs 1,380 at the day’s high, and were trading up 3.7% at Rs 1,368 on BSE.
Earlier Friday, Reliance said 72 million subscribers have signed up for its ‘Prime’ plan, under which the users will pay it a fixed sum of Rs 303 per month over the next 12 months. Further, Reliance Jio also extended the deadline to sign up for Jio services to April 15.
Reliance Industries shares are on a sustained rise on the prospects of cash flows from its telecom business, which has seen heavy investments so far. Earlier last month, Reliance Jio Infocomm said it will start charging money from consumers for using its mobile telephony services, which it was offering so far for free.
The company’s free offers ended on March 31. However, it introduced a new scheme for its Prime subscribers, under which they would three months of complimentary services till June after their first purchase of a recharge worth Rs 303 or more.
A slew of brokerages have recently raised their target on share prices of Reliance Industries citing the company’s investments not only in telecom, but also in its traditional energy and petrochemicals businesses coming to bear fruit.
Global brokerage CLSA recently raised the target price on Reliance Industries’ shares to Rs 1,500 from Rs 1,350. CLSA maintained its ‘buy’ rating on the stock. It cited optimistic commentary by the company management on its telecom venture Reliance Jio, while also raising the valuation multiple on the refining business.
Jal Irani, Senior VP at Edelweiss Capital Services, had also recently said that Reliance Industries is also 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.”