Mukesh Ambani-led Reliance Industries Limited scaled new heights on Friday morning as the share price reached a new 52-week high after surging 2.08% as investors reacted to the news of another minor equity stake dilution in Reliance Jio.
Mukesh Ambani-led Reliance Industries Limited scaled new heights on Friday morning as the share price reached a new 52-week high after surging 2.08% as investors reacted to the news of another minor equity stake dilution in Reliance Jio. This time Mukesh Ambani has roped in Abu Dhabi-based sovereign investor Mubadala, for a 1.85% equity stake for a little over Rs 9,093 crore. The share price was trading at Rs 1,617.7 per share, now surging 83.5% from its 52-week low that the stock touched on March 23.
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With the most recent stake sale, Reliance Industries has now seen investors invest a total of Rs 87,655 crore in just six-weeks time. The investment comes just days after Reliance Industries completed India’s biggest ever rights issue, which was oversubscribed 1.59 times. The rights issue saw an overwhelming response from investors even at the current juncture when the coronavirus pandemic has brought the economy to virtual standstill. Reliance Industries saw investors put in Rs 84,000 crore, making it one of the biggest issues in the world by a non-financial company in the last one decade.
The recent investment from Mubadala, puts Reliance Industries’ total stake dilution at 19%. “Through my longstanding ties with Abu Dhabi, I have personally seen the impact of Mubadala’s work in diversifying and globally connecting the UAE’s knowledge-based economy,” Reliance Industries Chairman Mukesh Ambani said in a statement. Mubadala puts an equity value of Rs 4.91 lakh crore on Jio Platforms and an enterprise value of Rs 5.16 lakh crore.
Brokerage firms are upbeat on the stock with Axis Securities pinning a target price of Rs 1,700 per share. Emkay Global also is bullish on the stock with a target price of Rs 1,630 apiece. Risks associated with Reliance largely relate to the refining and chemical businesses, according to a number of brokerage firms. Lower demand domestically and globally could cause a dent in the firm’s refining and chemical margins, however, the Mukesh Ambani is already marketing Reliance as a technology firm as he aims to take advantage of the e-commerce market in India.