Reliance Industries Is First Indian Firm To Cross Rs 9 Lakh Crore In Market Cap
Mukesh Ambani, chairman and managing director of the Reliance Industries Ltd. (Photographer: Dhiraj Singh/Bloomberg)

Reliance Industries Is First Indian Firm To Cross Rs 9 Lakh Crore In Market Cap

Reliance Industries Ltd., owned by billionaire Mukesh Ambani, has become the first Indian company to cross Rs 9 lakh crore ($126 billion) in market capitalisation.

Shares of the oil-to-telecom conglomerate rose as much as 2.26 percent to Rs 1,428 apiece—an all-time high for the stock. It has risen 26.7 percent so far this year compared with the NSE Nifty 50 Index’s nearly 7 percent gain during the period, according to Bloomberg data.

The rally in RIL’s share price raised Ambani’s net worth to more than $54.3 billion, according to Bloomberg Billionaires Index. The richest man in Asia holds close to 47 percent stake in the owner of the world’s largest oil refining complex.

Information technology firm Tata Consultancy Services Ltd. is India’s second-biggest company by market capitalisation, while private lender HDFC Bank Ltd. ranks third.

The gain in RIL’s market cap came ahead of its second-quarter results scheduled to be announced on Friday. Data compiled by BloombergQuint show that the company’s net profit is expected to rise the most in nearly four years in the quarter ended September on the back of corporate tax cuts.

Its profit may rise by about 7 percent sequentially in the July-September period, the most in 15 quarters.

The conglomerate’s operating profit, too, is expected to rise for the first time in five quarters, led by a recovery in refining margin and lower feedstock prices.

Singapore gross refining margins, the Asian benchmark, jumped 86 percent over the previous three-month period to average around $6.5 per barrel—the highest in six quarters—because of an increase in petrol and fuel-oil product spreads. A higher gross refining margin means the company would be able earn more for converting every barrel of crude oil into fuel.

But lower refining volumes and weakness in petrochemical margins may offset some of the benefits.

Growth at Reliance Jio Infocomm Ltd.—the telecom arm of Ambani-controlled group—will continue, aided by strong subscriber additions. Analysts expect Reliance Jio to add close to 2.4 crore subscribers in the quarter ended September. Still, the average revenue per user is expected to fall as the operator adds more JioPhone subscribers who come at lower rentals, lured by cashbacks on digital recharges.

Growth in RIL’s retail segment is likely to moderate due to seasonal weaknesses.

Analysts would be keen on updates on RIL’s deal with Saudi Arabian Oil Co., in which the Mumbai-based company plans to sell a fifth of its petrochemicals and refining business to the oil giant. That, along with signs of a decline in capital expenditure intensity, should increase investor confidence.

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