Reliance Industries Ltd’s shares have gained 52% in the last 52 weeks, giving huge bonanza to the investors in the heavyweight blue-chip company, helped by its investments in telecom, petrochemicals and retail businesses bearing fruit. The shares of Mukesh Ambani-led Reliance Industries have seen a massive gain over the last one year, rising as much as 52.45% during the period to Rs 1,531.05 as at Friday’s close.
Reliance Industries recently surpassed the Tata Group cash cow Tata Consultancy Services to become India’s most valuable company, with its market capitalisation topping Rs 5,00,000 crore today — Monday, July 17. The petrochemicals-to-petroleum-to-retail-to-telecom giant Reliance Industries’ shares are on a sustained rise on the prospects of cash flows from its telecom business, which had seen heavy investments so far.
Jio’s rapid rise
RIL shares saw a massive jump in late February on the prospects of fresh cash flows from the company’s telecom business, when Mukesh Ambani announced that Reliance Jio has acquired over a 100 million subscribers in just less than six months of the launch of services, and said that the company would start paid services in April. Shares saw another spurt in late March as the date of the start of paid services on Jio network drew closer.
Reliance Jio Infocomm has taken the Indian telecom industry by storm but Mukesh Ambani is not yet done with expanding the venture, as Reliance Industries plans to raise Rs 25,000 crore to invest into the group’s disruptive telecom venture, which has already seen massive investments and commitments worth just shy of Rs 2 lakh crore.
Earlier April, Reliance Industries raised to propose its capital expenditure on Reliance Jio by Rs 18,000 crore in the current quarter, adding to the Rs 1.79 lakh crore that it had already put into the venture thus far. Reliance Jio had said that it would add another 100,000 towers to the existing network of 100,000 mobile towers. It is also in the process to launch optical fibre based home broadband services under the name of ‘Jio Fibre’, and is currently testing the network along with trial offers in major cities. Reliance Jio has grown at a breakneck speed since the official rollout of services on 5 September 2016. It crossed 50 million subscribers in just 83 days, and 100 million in 170 days, adding at an average rate of six lakh subscribers per day.
The rise in Reliance Industries’ shares is also reflecting the growth and monetisation of its assets in its traditional businesses, including petrochemicals and oil & gas. In June, RIL successfully commissioned the third and last crystallisation train (Train 3) of its Para-xylene unit at its Jamnagar complex, doubling the company’s PX processing capacity.
Earlier last month, Reliance Industries said it will further invest Rs 40,000 crore with its partner BP Plc for development of its flagship gas field KG D6 in Krishna Godavari basin off India’s east coast, after a hiatus of seven years when the British oil giant stepped in by picking up a significant minority stake in a block that would become India’s poster boy for natural gas output.