Mukesh Ambani’s promise to transform Reliance Industries (RIL) from an energy giant to a technology-driven consumer company made the street ate last year. Tension eased in silence after the placement storm.
However, RIL shares are warming again as some of the promises move closer to reality. The nearly 6 per cent intraday rally of India’s largest conglomerate, which is interested in all oil and gas from telecommunications and retail, is the most significant change in the stock in the last two months.
The rise in RIL shares has been so substantial that it is close to almost all Nifty benchmarks at 1 p.m. (May 28). Compared to last week, it has risen more than 2%. By comparison, RIL has risen 5.7%
RIL Stock PriceBSE / Business Insider India / Flourish
However, investors need to keep in mind that this is still the 1,900 to 2,200 traded by RIL since November last year.
The Bank of America Global Securities report, dated May 19, 2021, suggests that RIL is the driver’s seat on the telecommunications, retail, and digital fronts. “Overall, we believe RIL is in a good position in its consumer business: telecommunications, retail and digital will benefit in the years to come as it becomes increasingly attractive,” the report states.
This is the fourth time that the weekly growth of the Reliance stock has exceeded 4% this year.
Google is partnering with Reliance Join for low-cost smartphones
One factor behind the massive rise in RIL’s stock price may be the news of a partnership with technical giant Google on low-cost Jio smartphones.
According to the PTI report, Google CEO Sundar Pichai said they have started working on low-cost Jio smartphones.
In July last year, Google acquired a 7.7% stake in Jio Platforms for 33,737 ores. Both have joined Jion’s 2G-mukt Bharat (2G-free India) initiative, where Google is helping Jio build a low-cost smartphone that is supposed to be based on either Android or Kai.
Jio Platforms, Infibeam, apply for an NUE license.
Reliance’s digital service devices Jio Platforms and Infibeam have signed an agreement and applied for a new Umbrella Share (NUE) license under the latter.
If this is accepted, Jio and Infibeam can adopt the payment platform. This platform would be for-profit and would allow the licensee to bill for transactions.
Another potential participant in the RIL rally
Balaji Telefilms, a quarter owned by Amban’s Reliance, has risen more than 20 percent since May 19.