Reliance Industries share price rises after two days of fall; UBS reiterates buy call, raises price target

Reliance Industries share price rose in early trade today after global brokerage UBS reiterated its buy advice and raised target price for the stock of Mukesh Ambani-led firm. Reliance Industries (RIL) share price rose 1.18% to Rs 1,449 compared to the previous close of Rs 1,432. The stock opened 0.4% higher at  Rs 1,438 on BSE. RIL share price has risen after two consecutive days of fall.

The large cap stock 3.33% short of the 52-week high of Rs 1,489.50 hit on October 31 , 2019. On December 11, 2018, RIL share price hit a 52-week low of Rs 1,055 on BSE. RIL share price has gained 30.12% during the last one year and risen 29% since the beginning of this year. UBS said plans to re-organise its investment in Reliance Jio Infocomm Ltd (RJIL) to make Jio a net debt-free company by the end of the current fiscal could unlock significant value for the conglomerate.

Sensex Today Live: Sensex hits fresh high of 40,676, Nifty above 12,000; Indiabulls Housing Finance jumps 11% post Q2 result

Jio's capital structure will become similar to global technology peers as reorganisation proposal involves a debt transfer from the telco to RIL standalone.

"Our understanding from interactions with management is that the strategy would: optimise platform entity capital structure with fair value of $60-70 billion, facilitate early monetisation and potential partnerships with global platform companies like Alphabet, Amazon and Alibaba," UBS said.

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The brokerage reiterated its 'Buy' advice for RIL stock and increased the price target from  Rs 1,500 to  Rs 1,750. In October end, Reliance Industries said it would set up a new unit to bring all its digital initiatives and apps under a single entity, and infuse Rs 1.08 lakh crore equity into this new unit.

The new structure will also create the largest digital services platform company in India. The new entity will continue to work on technologies in areas such as healthcare and education, while also looking at next-gen competencies such as artificial intelligence, Blockchain, virtual and augmented reality, among others.

The announcement helped RIL to scale 52-week high of Rs 1,489.50 on October 31.

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Meanwhile, the Sensex hit its all-time high led by gains in realty stocks after Finance Minister Nirmala Sitharaman announced an alternative investment fund yesterday to help the real estate sector finish pending housing projects. The government will infuse Rs 10,000 crore in this fund. SBI, LIC and other sovereign funds will add to this fund to take it to Rs 25,000 crore and beyond.

While Sensex scaled a fresh all time high of 40,676 in the early session, Nifty reached intraday high of 12,021.40, mere 81.65 points away from the all-time high of 12,103.05 hit on June 3 this year.

By Aseem Thapliyal