RIL shares rally on Abu Dhabi investment deal

Billionaire Mukesh Ambani led petrochemicals to telecom giant Reliance Industries (RIL) share price Monday rallied climbed to fresh record of Rs 1,618.40 on the National Stock Exchange (NSE) during the intraday trade after the company sold 1.16% stake in its digital unit to Abu Dhabi Investment Authority (ADIA) for Rs 5,683.50 crore.

It gained 2.74% to touch a one-year high of Rs 1,624 on BSE. Last week, RIL received Rs 9,093.6 crore from Mubadala Investment Company by selling part of Jio Platforms stake.

With the latest investment, Jio Platforms cumulative fund raising aggregate to Rs 97,885.65 crore that will help pare debt at the oil-to-telecom conglomerate. RIL raised funds from leading global technology and growth investors including Facebook, Silver Lake, Vista Equity Partners, General Atlantic, KKR and Mubadala in less than six weeks.

The latest investment in Jio Platforms comes at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore.

Facebook and private equity funds Silver Lake, Vista Equity Partners, General Atlantic and KKR together hold 17.12% stake in Jio. The latest would take the combined holding of overseas investors to 18.97%.

RIL has targeted raising Rs 85,000-Rs 90,000 crore from stake sales in Jio Platforms. The stake sales will help it achieve its zero-net debt ahead of the March 2021 target. At the end of last March, Reliance had outstanding debt of Rs 3.36 lakh crore and cash of Rs 1.75 lakh crore, bringing its net debt to Rs 1.61 lakh crore.

The Mubadala investment comes just days after RIL completed the country’s biggest-ever rights issue, which was oversubscribed 1.59 times.

Following the rights issue, on Thursday, RIL reclaimed the Rs 10 lakh crore market capitalisation mark. It’s market cap stands at Rs 10,12,751.39 crore, makes it most valuable company in the country.

Net net we believe the market are looking forward to FY21 numbers which will see a significant impact of reduced debt and incremental new business from JioMart coming in which is expected to boost earnings ahead for Reliance.

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