The Mukesh Ambani-helmed Reliance Industries (RIL) is now India’s first $150-billion company in terms of market capitalisation. Share market experts tracking the company for decades say that RIL’s market-cap could still double from the current levels, in around three years.
On Friday, when RIL scaled the $150-billion milestone, its share price had gained 6.23 per cent to close at ₹1,759. It took RIL’s market capitalisation to ₹11.15-lakh crore, which comes to around $150 billion considering an exchange rate of 76.18 for the rupee against the dollar.
RIL’s market-cap now is higher than that of Total SA, Royal Dutch Shell and BP among the top global energy players. But it is still lower than that of Exxon Mobil, Chevron and Saudi Aramco.
Investments in Jio
However, the recent jump in RIL’s valuation has been on the back of a slew of investments into its telecoms venture Jio. The telecom company is an arm of RIL, which is likely to be hived off and listed separately, market analysts said.
In the past 58 days, RIL has managed to attract ₹1.68-lakh crore as investments into Jio from marquee names, including Facebook and PIF, General Atlantic, Silver Lake, Vista Equity Partners, KKR, Mubadala Investment Company, Abu Dhabi Investment Authority, TPG and L Catterton.
“Jio alone could scale a market-cap of around $200 billion in coming 3 to 5 years,” said Deven Choksey, MD, KR Choksey Investment Managers.
“Jio is more than a telecom company. You cannot restrict yourself to calling it just a mobile phone network service provider,” Choksey said. The other two verticals of RIL, which is oil & chemicals and the retail business, will carve out around $100 billion in market-cap, he felt. “Overall, RIL’s valuation may rise to around ₹25-lakh crore in next few years,” he said.
The only risk of a hit to RIL’s valuation now is the global scenario. If the valuation of top global companies takes a massive hit due to worsening financial conditions, it could also affect RIL, analysts say.
In just 59 trading sessions, the share price of RIL has doubled. It rose from a low of ₹867 on March 23 to touch a high of ₹1,788 on Friday. The Ambani family-led promoters own a 50.29 per cent stake in RIL. It is speculated that Jio may list on the US stock exchange first, sometime next year.
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