Shares of Reliance Industries Ltd (RIL) hit market capitalization of Rs16 trillion for the first time on Wednesday as investors continued to buy the stock, anticipating higher valuation amid stake sale in Reliance Retail.
The stock gained 2.2% to hit a fresh record high of Rs2,368.8 on BSE in morning trade, briefly pushing its valuation across Rs16 trillion before pulling back slightly. At 11.13am, the stock was trading at Rs2,346.70 on BSE, up 1.27% from its previous close. Year to date it is up 56.68%.
On 9 September, California-based private equity fund Silver Lake picked up 1.75% stake in Reliance Retail Ventures for Rs7,500 crore, valuing the company at Rs4.21 trillion, or $57 billion. Mint reported that the retail arm is set to draw additional investments worth $5 billion from KKR and Co., Mubadala Investment Co. and Abu Dhabi Investment Authority.
Earlier, unconfirmed media reports indicated that RIL was looking to sell 40% stake in Reliance Retail to Amazon for a consideration of $20bn.
“With Reliance Retail’s (RR’s) dominance in offline and Amazon’s strength in online, the marriage seems perfect. The challenges could be RR’s online ambition, deal structure, control related issues, etc. A potential deal could result in a O2O behemoth impacting the entire consumer ecosystem,” said Jefferies India in a report to its investors.
Recently, Bloomberg reported that investor demand for Reliance Industries Ltd’s retail business is so strong that Carlyle Group Inc. and SoftBank Group Corp. are among those that have been put onto a waiting list.
“We expect interest from strategic investors in RRVL (Reliance Retail Ventures Ltd) that could expand the digital footprint of the company. Moreover, the stake sale in RRVL will improve the health of the balance sheet in a challenging macro for O2C business in the near term,” said Axis Capital in a report to its investors.
RIL, India’s largest company, now has a market capitalization of Rs116.01 trillion, followed by Tata Consultancy Services (Rs9.35 trillion), HDFC Bank (Rs5.95 trillion), Hindustan Unilever Ltd (Rs4.99 trillion), and Infosys (Rs4.19 trillion).
Among global oil and gas companies, Saudi Aramco, with a market cap of $1.93 trillion, still retains the top spot, followed by RIL. Among global stocks, Apple Inc. is the world’s most-valued company with a market value of $1.97 trillion, followed by Saudi Aramco with $1.93 trillion, Microsoft Corp ($1.55 trillion), Amazon.com Inc ($1.55 trillion), and Alphabet Inc ($1.03 trillion).
News Source:- livemint