Shares of Mukesh Ambani-led Reliance Industries Limited (RIL) continued their rally to touch a fresh all-time high of Rs 1,571 on Wednesday on after its telecom arm announces plans to increase tariffs on call and data services.
With the new all-time high, the conglomerate is nearing a market capitalisation of Rs 10 lakh crore.
On Tuesday, RIL became the first Indian company to cross the market cap of Rs 9.5 lakh crore. In fact, with a market cap in dollar terms at around $133.20 billion on Tuesday, it beat Total SA's $131.44 billion and BP Plc's $103.22 billion, the other listed global energy giants.
It is also narrowing its gap with PetroChina Co., which currently holds the title of being Asia's biggest oil company by market cap.
Morgan Stanley's bullish stance on RIL
The surge was also a result of global brokerage firm Morgan Stanley's update on the stock's rating. It has maintained an 'overweight' rating on the stock and noted that most of the factors considered in bull case price target of Rs 2,000 such as higher telecom tariffs, monetisation of the telecom ecosystem, higher gross refining margin (GRM), and recovery in the petrochemical cycle are coming into play.
It further said that after investors receive more clarity on debt reduction, it should help earnings multiples of the company. It has set a target price of Rs 1,469 for the stock.
Increase in tariffs
On Tuesday, following the decision of its competitors in the telecom business, Reliance Jio Infocomm said that it would raise tariffs in the "next few weeks" and will be taking other steps as per the regulator's recommendations to strengthen the industry and sustain investments.
"Like other operators, we will also work with the government and comply with the regulatory regime to strengthen the industry to benefit Indian consumers and take measures including appropriate increase in tariffs in next few weeks in a manner that does not adversely impact data consumption or growth in digital adoption and sustains investments," it said.
Earlier on Monday, Vodafone Idea and Bharti Airtel informed of their plans to hike its data and mobile tariffs from the next month. However, the three operators have not specified the quantum of increase in prices.
Shares of Vodafone Idea and Bharati Airtel have also been trading higher post the announcement.