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Explained: RIL shares on a roll! What should investors do now?

Explained: RIL shares on a roll! What should investors do now?

The large-cap stock rose 2 per cent to hit an all-time high of Rs 2,724.70 on BSE. With a market capitalisation of more than Rs 16,00,000 crore, the shares stand higher than 5-day, 20-day, 50-day, 100-day and 200-day moving averages.

Explained: RIL shares on a roll! What should investors do now? Explained: RIL shares on a roll! What should investors do now?

Shares of Reliance Industries were on a roll after the company said it will acquire a 40 per cent stake in Sterling & Wilson Solar Ltd (SWSL), a global pure-play, end-to-end solar engineering, procurement, construction (EPC) solutions provider, through its wholly-owned subsidiary Reliance New Energy Solar Ltd (RNESL).
 
The RIL arm will acquire a 15.46 per cent stake in the company through preferential allotment of 2.93 crore equity shares for Rs 375 per share, while it will also acquire 1.84 crore equity shares, equivalent to a 9.7 per cent stake, from the company's promoter SPCPL at the same price.
 
The large-cap stock rose 2 per cent to hit an all-time high of Rs 2,724.70 on BSE. With a market capitalisation of more than Rs 16,00,000 crore, the shares stand higher than 5-day, 20-day, 50-day, 100-day and 200-day moving averages.
 
The share hit a 52-week low of Rs 1,830 on January 29, 2021. The stock has gained 19 per cent in one year and has risen 34 per cent since the beginning of this year.
 
Post this, RNESL will also make an open offer to the public shareholders of SWSL to acquire up to 4.91 crore equity shares of the company, representing a 25.9 per cent stake, as per the regulation of the Securities and Exchange Board of India (SEBI).
 
"SWSL, with its engineering talent, deep domain knowledge, global presence, and experience of executing some of the most complex projects globally, will become an important part of our solar value chain. This will enable us to deliver our comprehensive, end-to-end ecosystem leading to cost-efficient green energy for Indian consumers," RIL Chairman Mukesh Ambani said in a statement.
 
"We retain ADD with a revised Fair Value of Rs 2,800 noting near-term triggers from recovery in refining cycle, sustained momentum in subscriber additions post the imminent launch of JioPhone Next, potential hike in telecom tariffs and anticipated strong rebound in retail business," said Kotak Institutional Equities in a research report.
 
Jefferies has maintained a 'Buy' rating on Reliance Industries and raised the target price to Rs 3,050 from Rs 2,580 per share.
 
"Technically, on the daily charts, Reliance has a fresh breakout above Rs 2,600 for the target of Rs 3,000. Investors may buy on corrections as Reliance may touch Rs 3,000 in near terms," Dr Ravi Singh, Vice President and Head of Research, ShareIndia told BusinessToday.in.
 
According to Sandeep Matta, Founder, TRADEIT Investment Advisor, "the company is a must-have counter in every investors' portfolio due to its solid balance sheet, improving market share, diversified portfolio, and above all strong management. We, therefore, recommend investors to buy and accumulate more on dips for the long-term target of Rs 4000."
 
ICICI Direct said that the long-term prospects and dominant standing of RIL in each of its product & service portfolios, provides comfort for long term value creation.
 
"RIL's consumer business will be the growth driver, going ahead. The company has a strong balance sheet post fundraising while its traditional business will continue to generate steady cash flows," it added.
 
Recently, the company incorporated a new subsidiary in the UAE for trading in crude oil, petroleum products and agricultural commodities.
 
Reliance International Ltd has been incorporated as a wholly-owned subsidiary in Abu Dhabi Global Market, the United Arab Emirates (UAE), the firm said in a stock exchange filing.
 
According to MarketsMojo, the company has high institutional holdings at 38.38% and the technical trend has improved from Mildly Bullish on August 30, 2021, and the stock is technically in a Bullish range now.
 
Multiple factors for the stock are bullish like MACD, Bollinger Band, KST and DOW. However, it has an expensive valuation with a 2.3 Price to Book Value.