Index heavyweight Reliance Industries (RIL) hit a fresh record high of Rs 1,847.7, advancing 3.4 per cent, on the BSE on Monday after the company bagged 12th foreign investment for its digital arm Jio Paltforms on Friday. The oil-to-telecom behemoth announced a stake sale of 0.39 per cent in its digital services subsidiary to Intel Capital for Rs 1,894.50 crore.
Intel Capital is an arm of Intel, the world's largest semiconductor manufacturer. It joins 11 other investors, including sovereign funds and private equity firms, which now collectively own 25.09 per cent in Jio Platforms. READ HERE
In the past two months, Jio has raised Rs 1.17 trillion through stake sales to ramp up its digital services business and expedite its debt reduction goals.
At 1:20 am, the stock was trading 3.27 per cent higher at Rs 1,84595 on the BSE. A combined 15.20 million shares had changed hands on the counter on the NSE and BSE till the time of writing of this report. Besides, its market capitalisation (m-cap) hit a fresh high of Rs 11,70,222.37 crore, BSE data shows. Combine it with m-cap of Reliance Industries Partly-Paid shares, whose m-cap stood at Rs 40,005.09 crore, the total m-cap crossed Rs 12 trillion mark.
The company had breached the Rs 11 trillion m-cap-mark on June 19 when it announced that it has become net-debt free well ahead of its deadline of March 2021.
Along with the stake sale to BP in the petro-retail JV, the total fund raise is in excess of Rs 1.75 lakh crore. With these investments, RIL has become net debt-free. The company’s net-debt was Rs 161,035 crore, as on 31st March 2020, Mukesh Ambani, chairman, RIL had said in a statement. READ HERE
“We have received strong interest from strategic and financial investors in our consumer businesses, Jio and Reliance Retail. We will move towards listing of both these companies within the next five years,” he had said.
Digital services accounted for just 10 per cent of the company’s operating profit in FY18, and were the third-largest segment in FY20 after petrochemicals and refining. However, analysts at HSBC expected it to contribute 36 per cent of RIL’s consolidated operating profit for FY21, the highest across its segments. Both the digital and more importantly the retail business are expected to drive the next round of value unlocking in RIL.
For those at Morgan Stanley, asset monetisation in Jio Platforms along with the $7 billion rights issue should reduce RIL's net debt by more than half.
"Multiple catalysts are in play with faster than expected deleveraging, improving demand and margin outlook on refining and chemicals, top quartile earnings CAGR of 23 per cent over F20-23, and digitisation, supporting multiples," the brokerage said in a report issued on July 4.