Reliance Industries stock jumped over 3% today. The company’s market capitalization surged above Rs 18.44 lakh crore.
Reliance Industries share price soared 3.5% to Rs 2,727.8 today after the announcement that Reliance Retail will reduce its equity share capital to limit it to the promoters and the holding company. Mukesh Ambani-led firm said that the Reliance Retail board has approved the reduction of the equity share capital to the extent held by shareholders other than its promoter and holding company Reliance Retail Ventures. The shareholders of Reliance Retail – which is unlisted – will receive Rs 1,362 per share. RIL’s market capitalization surged above Rs 18.44 lakh crore today.
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Separately, Reliance Industries has decided to demerge its financial services unit Reliance Strategic Investments. RIL has fixed July 20 as the record date to determine the equity shareholders entitled to receive shares of Reliance Strategic Investments (RSIL). Under the scheme of the arrangement, Reliance Strategic Investments will allot one fully paid-up equity share of RSIL of face value of Rs 10 each, for every one share of Reliance Industries as of the record date. Reliance Strategic Investments will then be renamed Jio Financial Services (JFSL).
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Should you buy, sell or hold RIL stock?
RIL: Buy; Target Price – Rs 2825
“JFS owns 6.1% in RIL, which is valued at INR1.1t. This would represent a substantial portion (~90%) of JFS’s net worth. Excluding investments in RIL shares, JFS’s net worth would be ~Rs 100b. Assuming that the investments in RIL shares represent ~90% of JFS’s net worth, the book value per share of JFS would be ~ RS 190. (Refer Exhibit 1). Our current SOTP-based TP of Rs 2,825 for RIL does not include the JFS value; hence, this event could lead to value-unlocking potential for RIL,” said analysts at Motilal Oswal.
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RIL Stock Technical Outlook
“Reliance has been gaining momentum and witnessed a strong and consistent upside in the last few weeks. It has been one of the strongest large-cap stocks with constant formations of higher highs and higher lows on the daily charts. The stock has witnessed a breakout from the 1-year ascending channel on the daily charts and is currently trading near the previous swing high level of Rs 2755. The rsi has also seen a breakout above 72 levels which can push the stock price higher. A close above Rs 2755 can push it towards the Rs 2850-2900 zone. Fresh entry is advised at channel breakout retest level of Rs 2665 for an upside till Rs 2900 levels. Those who have already bought can hold the stock with stop loss trailed at 2660,” said Gaurav Bissa, VP, InCred Equities.
