Shares of Reliance Industries (RIL), India’s largest company, are scheduled to trade ex-split on Monday, October 28. The Mukesh Ambani-led conglomerate had fixed it as the record date for the issue of equity shares. Investors who will be having the shares in their demat accounts as on the given date shall be considered eligible for the bonus shares.
Mukesh Ambani had RIL announced the issue of bonus shares in a 1:1 ratio in August 2024 during the 47th annual general meeting (AGM), which was later approved by the company board of directors. The board also approved an increase in authorised share capital from Rs 15,000 crore to Rs 50,000 crore.
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Investors who will buy shares of Reliance Industries on or before Friday, October 25 will be eligible for getting the bonus shares of the company. However, bonus shares shall not be alloted to the investors, who will buy the stock on Monday, October 28 as the stock shall trade-ex split then. However, bonus shares shall be credited later in the eligible shareholder’s demat accounts.
The bonus share is anticipated to attract increased investor interest, particularly as the company’s retail segment focuses on strengthening the operations. This will help it rapidly scale up this business in the coming quarters and years and sustain its industry-leading growth momentum, said Prathamesh Masdekar, Research Analyst at StoxBox.
“Overall, we believe the company is well-versed in dealing with short-term headwinds and continues to perform well across all business segments, with expectations of further improvement once the global macro environment is stable. We thus believe investors should buy reliance industries from a long-term perspective,” he said.
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This marks sixth bonus issue by Reliance Industries and the first since 2017. Prior to the bonus issue in 2017, Reliance issued a 1:1 bonus share in 2009. The bonus shares will be issued by capitalizing from the company’s securities premium account, general reserves, or retained earnings.
Reliance Industries a portfolio pick, which should be considered for a long-term. Despite an underperformance in the last one year, investors should buy RIL for consistent returns. There is no difference for investors if they buy it even after trading ex-bonus, said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.
Shares of Reliance Industries Ltd were trading little changed at Rs 2679.00 on Thursday, with its total market capitalization of more than Rs 18.15 lakh crore. Shares of Reliance Industries have tumbled nearly 17 per cent from its 52-week high at Rs 3,217.90 hit in July 2024.
G Chokkalingam, Founder at Equinomics Research is extremely bullish on Reliance Industries. He said that the stock appears to be extremely attractive after the recent correction from its 52-week highs. Bonus and split create wealth for growth companies in the long term and Reliance is very much in that list.
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“Proven track record of building strong businesses, potential value unlocking in telecom and retail business, possible rebound in oil business and benefits of ongoing capital expenditure will benefit the shareholders,” Chokkalingam said, quoting RIL among the best largecap investment ideas.
Reliance Industries reported a 4.8 per cent (YoY) fall in consolidated profit at Rs 16,563 crore for the September 2024 quarter (Q2), missing analysts’ expectations by a wide margin. RIL’s consolidated revenue for Q2 came in at Rs 2.32 lakh crore, marginally higher than a year ago. Ebitda for the quarter came in at Rs 43,934 crore, with margins falling 50 basis points to 17 per cent.
Reliance Industries reported a steady Q2FY25 with revenue growth driven by its digital and retail segments, said Bajaj Broking. “Despite challenges in the O2C business, the company’s diversified portfolio helped it navigate through global uncertainties, making it well-positioned for future growth,” it said.
Elara Capital expects benefits from tariff hike in telecom to be diluted by falling margin in the oil-to-chemicals (O2C) segment. “We reiterate ‘accumulate’ on Reliance Industries” with a target price of Rs 3,265. Key upside risks to its call are IPO plans as regards digital services (telecom) or retail and further positive developments in the new energy segment.
JM Financial reiterated ‘buy’ on RIL with a target price of Rs 3,470 as it believes that net debt concerns are overdone, and also because RIL has industry leading capabilities across businesses to drive robust 14-15 per cent EPS CAGR over the next 3-5 years
