Reliance Industries Limited (RIL) is set to announce a 1:1 bonus issue, which will go ex-bonus on October 28, just before the Dhanteras festival. This bonus issue, one of the largest in the company’s history, comes after a seven-year gap since its last bonus announcement in September 2017.
Current Stock Performance:
- Share Price: RIL’s stock closed last week at ₹2,655.45.
- Market Capitalization: The company currently has a market cap of approximately ₹17.97 lakh crore, having recently fallen from ₹18 lakh crore.
- Recent Trends: In the week leading up to October 25, RIL’s stock has declined by about 3%, with a total decrease of over 10% in the last month and a 9.3% dip over the past six months. However, year-to-date, the stock has risen by 2.5%.
Bonus Issue Details:
- Bonus Structure: For every existing equity share of ₹10 face value, shareholders will receive one new fully paid-up equity share. The record date for determining eligible shareholders is set for October 28, 2024.
- Partly Paid Shares: RIL has cancelled 142,565 forfeited partly paid-up shares and converted a total of 55,095 shares to fully paid-up, reflecting the company’s ongoing efforts to manage its share capital effectively.
Brokerage Insights:
- HDFC Securities Recommendation: HDFC Securities has identified RIL as a top pick for the Diwali season, setting a target price of ₹3,243 for the next year. The recommended buying range is between ₹2,447 and ₹2,716.
- Key Growth Drivers:
- Reliance Jio: The digital services subsidiary is gaining momentum, having added the highest number of wireless subscribers recently. Analysts expect the average revenue per user (ARPU) to rise to ₹200-205 per month in FY25 from ₹195.1 in Q2 FY25.
- Reliance Retail: With 18,946 stores across 7,000 cities and 327 million registered customers, the retail arm is expanding its offerings across various categories, including grocery, electronics, and fashion.
- Oil to Chemical Business: RIL is increasing its capacities, including a new ethylene oxide column and new PVC/CPVC plants scheduled for commissioning by FY27. The company is also focusing on renewable and bio-energy initiatives to reach zero emissions by 2035.
Future Prospects:
- E&P Investments: RIL has made significant investments in its Exploration & Production business, ramping up natural gas production from the KG basin, with Q2 FY25 averages of 28.5 MMSCMD of gas.
- Renewable Energy Goals: The company is advancing projects at the Dhirubhai Ambani Green Energy Giga complex and aims to establish at least 100 GW of solar energy capacity by 2030. A battery Giga factory is also planned for 2026, focusing on battery chemicals and recycling.
As Reliance Industries prepares for its bonus issue, the combination of its recent price corrections and positive projections from analysts suggests that this could be an attractive opportunity for investors. The upcoming Diwali festival may further influence market sentiment as shareholders look to capitalize on RIL’s growth potential.
Disclaimer: This information is for educational purposes only and should not be considered as financial advice. Always conduct your own research or consult with a financial advisor before making investment decisions. The stock market involves risks, and past performance is not indicative of future results.
Leave a Reply