Shares of Reliance Industries (RIL) zoomed as much as 12.09 per cent to Rs 1,302.50 apiece on the BSE in the intra-day trade on Tuesday after the company made a slew of announcements at its 42nd AGM (annual general meeting) held on Monday. Chairman Mukesh Ambani announced that Saudi Aramco and RIL have signed a letter of intent for a proposed investment in its oil-to-chemical division. The deal is likely to fetch $15 billion (nearly 1.06 trillion) for a 20 per cent stake.
The stock witnessed its biggest single-day gain in the last 10 years. Before this, it had rallied 24 per cent in the intra-day trade on May 18, 2009, data show. It, however, ended the day at Rs 1,275 levels on the NSE, up nearly 10 per cent.
RIL is also looking to turn debt-free in the next 18 months. As part of the debt-reduction plan, RIL looks to find global partners for its retail and telecom businesses. The company also plans to unlock value in real estate and financial investments. READ MORE
That apart,it plans to list Reliance Jio and its retail business in the next five years. In line with expectation, commercial services of the much-awaited Jio GigaFiber will start from September 5 - the third anniversary of Reliance Jio, with base plan starting at a speed of 100 MBPS and going up to 1 GBPS with prices ranging from Rs 700 to 10,000 per month. Ambani also announced 'Jio First Day First Show' plan under which Premium JioFibre customers will be able to watch movies in their living rooms on the day of the release. This will be rolled out in 2020.
Another big announcement at the 42nd annual general meeting (AGM) was Reliance's partnership with Microsoft under which Jio will set up data centres across India and Microsoft will bring the cloud platform.
"Over the next 12 months, Reliance Jio will install one of the largest blockchain networks in the world in India," said Ambani. "We are investing in 14 technology start-ups. Jio aims to connect one billion homes via IoT. Jio fiber will empower 2.4 million small, medium enterprises." READ MORE
Additionally, RIL and its partner, BP Plc, will together invest Rs 35,000 crore for bringing to production three sets of natural gas fields in the Krishna Godavari basin block in the Bay of Bengal by 2022, chairman Mukesh Ambani said.
"The core segment is expected to remain under pressure. However, the decline of nearly 20 per cent in the stock price since our last report, combined with the possibility of a decrease in net debt, makes us upgrade RIL to Buy. We reiterate our target price of Rs 1,400, which includes valuation of core segments at 7.5x FY21 EV/EBITDA, Jio at Rs 230/share and Retail at Rs 414/share, said analysts at Motilal Oswal Financial Services (MOFSL) in a post-AGM note.