RIL climbs around 3%, hits new high as Co to sell 1.6% stake in Jio to ADIA

Continuing their breath-taking rally, shares of Reliance Industries (RIL) hit a fresh record high of Rs 1,624 apiece on the BSE on Monday, a day after the oil-to-telecom behemoth announced 1.16 per cent stake sale in Jio Platforms, its digital services subsidiary, to Abu Dhabi Investment Authority (ADIA) for Rs 5,683.50 crore, as it accelerates its debt reduction plan.

This is the eighth investment in Jio Platforms in seven weeks and values the company at Rs 4.91 trillion on equity value basis. So far, RIL has raised Rs 97,885.65 crore through 21.06 per cent stake sale to seven marquee investors, including Facebook and private equity firms like KKR and General Atlantic. READ MORE

Earlier on Friday, RIL announced that private equity firm Silver Lake has invested an additional Rs 4,546.80 crore in Jio Platforms to raise its stake in the firm to 2.08 per cent. READ MORE

At 09:29 am, the stock was trading 1.42 per cent higher at Rs 1,603 on the BSE. The market-capitalisation of RIL stood at Rs 10,16,079.58 crore. 

The benchmark, S&P BSE Sensex, was trading 1.7 per cent higher at 34,865.37 points.

Edelweiss Securities recently said that the company is expected to repay its entire reported net debt even if the Saudi Aramco deal is delayed. 

Last December, RIL signed an agreement with Abu Dhabi National Oil Company to explore setting up of an ethylene dichloride plant in the UAE. On Friday, Abu Dhabi government-owned Mubadala picked up 1.85 per cent stake in Jio Platforms for Rs 9,093.60 crore. The ADIA-Jio deal is a third such partnership by RIL with the UAE government entity in the recent months.

"We analysed RIL's balance sheet following the recent deal-making. Having raised, on aggregate, Rs 1.3 trillion in equity over the past month, we expect the company to repay its entire reported net debt of Rs 1.6 trillion in 2020-21, even if the Aramco deal is delayed," Edelweiss said in a research report on the company. READ MORE

Motilal Oswal Financial Services, in a report dated June 5, said that it expects Reliance Jio to garner revenue/EBITDA CAGR (Compound annual growth rate) of 22%/44% over FY20-22E along with healthy EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin expansion.  

"Although the company has witnessed subdued average revenue per user (ARPU) growth in 4QFY20, we believe this could be due to longer validity plans. RJio is expected to accrue the full benefit of the price hike in FY21," the brokerage notes. It maintains a "Buy" rating on RIL with the target price of Rs 1,743.