RIL just Rs 6,000 crore shy of hitting Rs 6 lakh crore in market cap

Reliance Industries shares hit an all-new lifetime high on Monday and were the biggest contributor in lifting the key benchmark indices to close higher. The market capitalisation of the Indian stock market leader Reliance Industries is just Rs 6,000 crore from hitting the figure of Rs 6 lakh crore. As per today’s close, it stood at Rs 5.94 lakh crore as per today’s close of Rs 938.1 on BSE while it was Rs 5.95 lakh crore. The stock of RIL hit a fresh all-time high today rising by 3.64% to Rs 943.45 before closing up 3.05% at Rs 938.1. In the intraday trade, its market capitalisation topped Rs 5.97 lakh crore on BSE.

Shares of RIL gained today after it seems that the company has pricing power and it is expected that a recent hike in mobile tariffs will lead to better numbers in the upcoming quarters. Reliance Industries stock also topped today’s volumes on Indian bourses. About 1.3 crore shares were traded on both NSE and BSE. The heavyweight stock of RIL alone added about 96 points to the Sensex gains.

RIL shares have jumped over 55% so far in the current year 2017. The company had hit a market cap of Rs 5 lakh crore just three months ago, July this year. Earlier this month, Reliance Industries its fiscal second-quarter net profit rose 12.5% to Rs 8,109 crore, just about meeting the expectations despite a Rs 271 crore loss on its telecom venture Jio, on the back of healthy refining and petrochemicals margins.

Reliance Industries’ shares are on a sustained rise on the prospects of fresh incomes from its petrochemicals and refining business’ under-commissioning facilities, and cash flows from its telecom business, which had seen heavy investments till early this year. Analysts feel that the last 8-9 years of the capital expenditure cycle for the company on its petrochemicals and refining businesses has come to an end now, and will going forward yield huge cash flows.

Earlier this year, Reliance Industries Chairman and Managing Director Mukesh Ambani had said at the company’s AGM that the Rs 3.3 lakh crore capital expenditure cycle was coming to an end, and would start generating free cash flows in the coming months. Out of this Rs 3.3 lakh crores, Rs 1.3 lakh crore was earmarked for Petrochemicals segment. Reliance Industries expects 65% of its capital expenditure investments to start returning cash flows in FY18.

As for the telecom business, RIL shares saw a massive jump in late February on the prospects of fresh cash flows from Jio, when Mukesh Ambani announced that Reliance Jio has acquired over a 100 million subscribers in just less than six months of the launch of services, and said that the company would start paid services in April. Shares saw another spurt in late March as the date of the start of paid services on Jio network drew closer. The company’s shares have been on an upmove since then.