Reliance (RIL) Stock tanks by 4% after today’s AGM
Reliance stock fell by almost 4% on Wednesday on the National Stock Exchange. The share of the company fell to Rs 1,845.60 which led to an erosion of shareholder wealth by Rs 1.26 lakh crore. After the fall, the market cap of the company was reduced to Rs 11.7 lakh crore.
“Deal with Saudi Aramco had not progressed as per the original schedule. Everyone was expecting a positive announcement on the deal progress. All other announcements are already known apart from google investment, plan to build affordable 4G smartphone and potential deployment of 5G services next year,” said Abhijeet Bora, Senior Research Analyst at Sharekhan.
Google the leading search engine is supposedly investing 33,737 crores in the company’s Jio Platforms. “The company is looking to add only strategic partners to Jio Platforms. Over the next 3 years, I see Jio adding half a billion mobile customers,” Ambani said.
With this investment Google becomes the second largest investor in Jio after Facebook invested Rs 43,574 crore for a 9.99% share in it.
“After successfully fulfilling the promise of becoming zero net debt company earlier-than-expected, Reliance Industries may now shift its focus on growing Retail business (JioMart) and overseas listing of Jio Platforms,” Prashanth Tapse, AVP Research at Mehta Equities told Moneycontrol.
RIL has become the biggest Private Ltd. company in India. Its business ranges from telecom to retail to petrochemicals. The telecom segment is doing very good business and aims to set up 5G network in India as soon as the spectrum is available. Also, the 5G phones will be available at a fraction of the current 4G phones available in the market at present.
The petrochemical business is also doing well, however the Reliance retail is hit by the current Covid19 conditions. Prashanth Tapse also says “Retail business to be a key value driver for Reliance over the long run though we see there would be some impact on business in FY21 due to the COVID-19 outbreak.”