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Good News for RIL Shareholders

Good News for RIL Shareholders

Published on 18 August 2021 Views 102 Comments 0

There is some piece of good news for Reliance Shareholders. Know about this good news about the company in this short article.

Introduction:

Stock Price of Reliance Industries (RIL) was up nearly by 3% on Monday 16th August 2021 on BSE in a single-day session. This rise in stock price was on account of the talks with Saudi Aramco which is in advanced talks to acquire some stake in the Oil-to-Chemical Business (O2C) business of Reliance Industries. Let's know more about this deal as we move ahead in this article.

Good News for Reliance Shareholders:

  • As per the reports, Saudi Arabian Oil Company, Saudi Aramco is in advanced talks to acquire a stake in the Oil-to-Chemical (O2C) units of Reliance Industries.
  • Accordingly, Saudi Aramco may acquire a 20% stake in O2C units of the business for about $20-$25 billion.
  • This acquisition is supposed to be an all-stock deal.
  • O2C business is the part of total businesses of Reliance Industries. And as per the reports, the O2C business itself is valued at around $100-$125 billion.
  • Currently, the market capitalization of Reliance Industries is around Rs. 14 Lakh Cr. which turns out to be $186 billion in Dollar terms.
  • Out of these total valuations of Reliance Industries of $186 billion, the O2C Unit only accounts for more than 60% of total valuation i.e., around $120-$125billion. Hence, the leftover portion accounts for the valuation of Reliance Jio and Reliance Retail. Clean and Green Energy Business which was announced by Mukesh Ambani in FY21 AGM has not been included in this valuation.
  • The other 2 businesses- Jio and Retail received valuations of around Rs. 5 Lakh Cr. Last year during the Covid Pandemic situation Reliance Industries grabs a continuous deal from Strategic Investors like Facebook, SilverLake, etc.
  • These businesses may also witness some upside in their valuation.
  • Considering the discounting pattern of the market, these businesses might also mark the valuation levels of $100 billion each.
  • If we sum up the above-estimated valuation of all the businesses of Reliance Industries (excluding Green Energy Business), it could reach up to $300 billion valuations.

Conclusion:

Looking at the above developing option and presence of organic growth available in the other businesses of Reliance Industries, this stock should be on the investor’s radar. This is not direct investment advice and hence one should consult their financial advisor before making any investment decisions.

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