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RIL jumps 12% post AGM; sees biggest single-day gain in 10 years

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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.






Debt-free status

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.

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Sitharaman’s sops for NBFCs may perk up lending, ease liquidity stress

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Illustration by Binay Sinha


To further ease the liquidity stress in the non-banking sector and nudge them to revive their lending activities, Finance Minister (FM) Nirmala Sitharaman on Friday announced a slew of measures for non-banking financial companies (NBFCs) and housing finance companies (HFCs). The government hopes this will result in more credit support for purchase of houses, vehicles, and consumption goods.


The government has provided additional support of Rs 20,000 crore to the stressed housing finance companies from National Housing Bank (NHB). With this, the additional liquidity support for the HFCs from NHB has gone up to Rs 30,000 crore.



In the Union Budget last month, the FM had encouraged public sector banks (PSBs) to buy high-quality pooled assets of NBFCs up to Rs 1 trillion for which the government would provide a one-time six-month partial credit guarantee for the first loss of up to 10 per cent.


The Reserve Bank of India (RBI) had also chipped in by tweaking banks’ bond-holding norms. This will allow banks to borrow an additional Rs 1.34 trillion exclusively for buying such pooled assets and giving loans to NBFCs. The FM on Friday said this partial credit guarantee scheme will be monitored at the highest level in each bank. Through this, it is expected that many of the assets will get quickly pooled and NBFCs will receive the necessary liquidity. “NHB has already settled some of the issues. NBFCs are receiving money from the banks and are moving towards funding,” said Sitharaman.


Sanjaya Gupta, managing director, PNB Housing Finance, said “This will support growth and ease the liquidity crunch. HFCs will now get an additional Rs 20,000 crore from NHB. The initiatives have potential to kick start the real estate sector.”


The government has also permitted NBFCs to use Aadhaar-authenticated bank KYC to avoid repeating the same process when a customer approaches it for credit. This has been a long-standing demand. The necessary changes in the Aadhaar regulations and Prevention of Money Laundering Act rules will be made, the FM said.


“This will streamline the process and also reduce frauds,” said Raman Aggarwal, chairman, Finance Industry Development Council.


The government has also asked PSBs and NBFCs to fast-track their collaboration to provide credit to micro, small and medium enterprises, small traders, self-help groups, and micro finance industry client borrowers.

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PACL Case: Sebi panel invites expression of interest for 28,974 properties

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Sebi


A committee headed by Justice R M Lodha has invited expression of interest (EoI) from prospective buyers for a total of 28,974 properties belonging to PACL Group.


Market regulator Sebi had set up a committee headed by former Chief Justice of India R M Lodha following a Supreme Court order to refund money to investors in the matter of PACL Group.



As per the notice issued by Sebi, the committee has divided the total 28,974 properties belonging to PACL group in four zones — east, west, north and south — with maximum properties being located in the southern zone.


Regarding PACL properties, the apex court’s order dated July 30 observed “we also leave it open to the committee to receive any further offers and to explore them after duly publishing a further notice on the website,” the notice said.


In pursuance of apex court’s order, the committee “invites Expression of Interest from prospective buyers clearly indicating therein, list of properties in each zone, its circle rate, the offer amount and other relevant details,” the Friday notice said.


“The proposal should be for properties in each zone aggregating in value not less than Rs 1,000 crore,” the notice added.


The notice further said that the last date of receipt of proposals is September 9.


PACL, also known as Pearl Group, had raised Rs 60,000 crore from public in the name of agriculture and real estate businesses and was found by Sebi to have collected these funds through illegal collective investment schemes over 18 years.

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Improved market access for domestic retail investors with Aadhaar-based kYC

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Markets, Investors, Indices, Stocks


The government will allow Aadhaar-based KYC for domestic retail investors, and necessary amendments to the rules under the Prevention of Money Laundering Act will be issued.


Announcing a slew of measures to boost the economy, the government said the Depository Receipt Scheme 2014 is expected to be operationalised soon by Sebi. “This will give Indian companies increased access to foreign funds through American Depository Receipt (ADR)/ Global Depository Receipt (GDR),” she said.



In order to improve market access for the domestic retail investors, Aadhaar-based KYC will be permitted for opening of demat account and making investment in mutual funds. In this regard, necessary notification for amendments in PMLA rules would be issued.

Besides, steps would be taken with regard to offshore rupee market.


“To bring offshore rupee market to domestic stock exchanges and permit trading of USD-INR derivatives in GIFT IFSC, Ministry of Finance is working with RBI to introduce this measure shortly,” the government said.

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