India's largest company, Reliance Industries (RIL) is all set to turn ex-bonus on Monday, October 28, a day before Dhanteras festival. Reliance plans to deliver its shareholders its one of the largest bonus issue as Diwali gift. Ahead of the ex-date, Reliance stock has significantly corrected with decline of over 10% in 1-months. This brings buy-on-dips opportunity. Brokerage HDFC Securities has selected Reliance among its top picks for Diwali Samvat 2081, with 1-year target range at Rs 3,243. This is also its pre-bonus target.
Reliance Industries Share Price:
RIL share price ended last week, on Friday, at Rs 2655.45 apiece, while erasing its Rs 18 lakh crore market cap levels to hold m-cap of Rs 17,96,726.60 crore. In the trading week from October 21-25, Reliance stock is down by 3% on BSE.
While in a month, the stock has dipped by at least 10.10%, and its half-yearly downside is over 9.3%. YTD, however, Reliance stock is up by 2.5%.
Reliance Industries Bonus Issue:
The largest oil and gas conglomerate has declared 1:1 bonus equity shares, meaning, it will allot 1 new fully paid-up equity share of Rs 10 face value for free, against every 1 existing equity share of Rs 10 face value.
The Mukesh Ambani-backed company has fixed Monday, October 28, 2024, as the record date to determine the members of the company, eligible for bonus equity shares in the 1:1 ratio.
Ahead of the bonus issue, Reliance has made key announcements for those investors who held its partly paid-up shares.
As per the latest regulatory filing, Reliance has cancelled 1,42,565 forfeited partly paid-up equity shares. In total Reliance had 1,97,660 partly paid-up equity shares, and it had set October 7th as the record date to turn these shares to fully paid-up. After the record date, the number of partly paid-up equity shares which became fully paid-up in accordance with the proposal approved by the Board of Directors of the Company is to the tune of 55,095 shares.
Post cancellation of the forfeited shares, the paid-up equity share capital of the Company is Rs. 6,766.19 crore divided into 676,61,86,449 fully paid-up equity shares of Rs. 10/- each, it said.
This will be the first bonus issue by Reliance in seven years. The last bonus issue was also of 1:1 ratio in September 2017. While Reliance's first bonus issue was also 1:1 in November 2009.
BUY Reliance Stock:
Brokerage HDFC Securities has set a target price of Rs 3,243 on Reliance with a buy recommendation for this Diwali season. The buy range is suggested between Rs 2447-2716, while the time horizon for the target is set till Next Diwali.
Key triggers for Reliance stock going ahead, as per HDFC Securities are:
- RIL's digital services subsidiary, Reliance Jio added the most number of wireless subscribers over the recent past.
Taking the recent tariff hike, HDFC Securities expects the average revenue per user (ARPU) could increase to Rs 200-205 per month in FY25E from Rs 195.1 per month in Q2FY25 and Rs 181.7 per month in Q1FY25. With the completion of the pan-India 5G rollout, R-Jio has increased its focus on ramping up revenue streams such as home broadband, digital TV, digital home solutions, and enterprise services. R-Jio will build large-scale AI infrastructure and develop Jio Brain, a suite of tools and platforms that span the entire AI lifecycle.
- Reliance Retail is already among the top 30 global retailers by revenue with 18,946 stores spread over 79.4 mn sq. ft. in over 7,000 cities and 327 mn registered customers as of Sept 30, 2024, Reliance will continue to expand in all categories, viz., grocery, FMCG, electronics, fashion, etc., through physical and digital platforms. It also plans to launch products internationally.
- In the Oil to Chemical business, RIL has recently commissioned a new column to increase ethylene oxide capacity by 45 ktpa and the new 1.5 mmtpa PVC and CPVC capacities at Dahej and Nagothane will commission by FY27E. New 1 mmtpa PTA capacity will complete in FY27E, and 3 mmtpa PTA capacity will now be completed in 2027, earlier plan was 2026. It is also building India's first world-scale integrated Carbon Fiber Plant at Hazira. The company also intends to transition to renewable and bio-energy to reach zero by 2035, while also improving profitability with lower energy costs.
- RIL has made significant investments in the E&P business and has witnessed a healthy ramp-up in the production of natural gas volumes from the KG basin. The average KGD6 Production in Q2FY25 was at 28.5 MMSCMD of gas and 20,832 bbl/day of Oil / Condensate.
- The company is working on fast-tracking various projects currently underway at Jamnagar's Dhirubhai Ambani Green Energy Giga complex. RIL plans to establish and enable at least 100 GW of solar energy generation capacity by 2030 through its subsidiary, Reliance New Energy Ltd (RNEL). Also, it plans to set up battery Giga factory by 2026. It will manufacture battery chemicals, cells and packs, leading up to energy storage solutions, and will include a battery recycling facility.
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