Billionaire Mukesh Ambani-controlled Reliance Industries (RIL) has surged ahead of global oil giants such as BP Plc, Royal Dutch Shell, ConocoPhillips and Phillips 66 combine and Sinopec in market valuation. It's on account of the recent deals with Facebook, Silver Lake and Vista Equity Partners for selling strategic stake in its telecom subsidiary Jio Platforms Ltd (JPL). Despite the slump in the equity market followed by coronavirus spread and lockdown, RIL's share price went up 3.3 per cent this year until May 8. The market capitalisation (MCap) of the oil to data conglomerate is at Rs 9.9 lakh crore ($131 billion) and expected to cross the Rs 10 lakh crore landmark for the second time soon as planning is on for more strategic stake sales in JPL in the coming days.
The market value of Shell crumbled 42 per cent so far this year to $128 billion. The British giant BP, which owns 30 per cent stake in RIL's upstream hydrocarbon assets, including in Krishna Godavari (KG) basin, has witnessed a 33 per cent crash in its share price and its MCap stands at $80 billion. The Chinese oil major Sinopec's value crashed 15 per cent to $72 billion.
American giant ConocoPhillips's market value is down 34 per cent and its refining and marketing business, which spun off in 2012 as Phillips 66, is down 31 per cent in this year. The combined market value of two firms is now at $80 billion. French firm Total ($89 billion), Russian giants Rosneft ($50 billion) and Luke Oil ($45 billion) are well behind RIL.
RIL was lagging behind these firms about three years back, before Reliance Jio was launched. In the new economic world order, when the consumer focused companies get higher valuations than manufacturing companies, RIL's diversification into retail and telecom scorched its valuations. The conglomerate, which is headed by Asia's richest man Ambani, is repositioning itself as a tech and retail giant with increasing stake in the petrochemical business as its traditional fossil fuel business expects to face challenges from electric mobility.
The investor confidence shot up in RIL because of the back-to-back strategic investments in its telecom subsidiary in the last three weeks. It helped the company to overtake the global giants in oil. However, it is still behind the biggest American companies --- Chevron ($178 billion) and ExxonMobil ($187 billion).
RIL's telecom and digital platform is valued higher than Vodafone Group Plc and America Movil of billionaire Carlos Slim. The private equity firms agreed to pick up a stake in JPL at a valuation of Rs 4.9 lakh crore ($65 billion). Vodafone is valued at $37 billion and America Movil is $42 billion in the stock market. American giants Verizon and AT&T are far ahead with over $200 billion valuations. Though RIL is behind retail giant Walmart ($345 billion), it's far ahead of British grocery major Tesco ($28 billion).
Compared to the biggest Indian stock market crash in the season on March 23, the MCap of RIL increased by over 76 per cent in about one and a half months. Refining, petrochemicals and retail contribute majorly to the revenues of RIL, besides telecom.
India's second most valued company is TCS and its MCap stands at Rs 7.11 lakh crore, followed by HDFC Bank (Rs 5.09 lakh crore) and Hindustan Unilever (Rs 4.91 lakh crore).