RIL stock hits fresh record high; MCap hits Rs 19.2 lakh crore

Shares of Reliance Industries Ltd surged 5 percent to a record, gaining for the third straight session and propelling the company’s market capitalisation to Rs 19.2 lakh crore.

The stock hit an all-time high of Rs 2,850 at 12.50pm on January 29.

The RIL stock gained after Bloomberg reported that Walt Disney’s India unit faces a significant erosion in valuation, possibly half, in the run-up to its proposed merger with Mukesh Ambani’s media business.

After negotiations, Disney’s India assets are now valued at around $4.5 billion, compared to its earlier demand for $10 billion, the report said.

The combined entity aims for an $11 billion valuation, with Disney holding a 40 percent stake.

Reliance Industries will own 51 percent, and the deal is set to be finalised in February, Bloomberg reported.

The collapse of the $10 billion merger between Sony and Zee Entertainment removes a potential major competitor, the report added.

The RIL stock has gained 8.6 percent in January following positive commentary on peaking capex and strong retail performance. Analysts have raised target prices and maintained their ratings.

According to analysts, there was a slowdown in capex in the December quarter as the completion of the 5G rollout approached. 

RIL has experienced negative free cash flow over the past three years, primarily due to telecom spending. 

With the fading of these expenses and an EBITDA run rate of $20 billion annually, RIL is anticipated to generate positive free cash flow for the next two years. 

Although net debt slightly increased in the three months ended December 31, quarter-on-quarter, due to the repayment of other capex liabilities, analysts predict a downward trend in the future, supported by reduced capex and an improved EBITDA run rate.