Reliance’s market capitalisation crosses $200 billion as firm sets sight on global investors

Similarly, a comparison between returns from RIL and Nifty over a period of three as well as five years shows that the giant has beaten the benchmarks consistently.

By Urvashi Valecha

Reliance Industries on Thursday hit another milestone as its market capitalisation sailed past $200 billion. The stock rose 7.29% on Thursday as the company looks set to bring in global investors in its retail business just as it did for its digital platforms business. It is the first Indian company to hit a market cap of $200 billion and its global rank is 42 among the world’s most valued companies.

Reliance Industries (RIL) propelled the benchmarks higher on Thursday after the index heavyweight rallied by 7.29% to touch a fresh all-time high of Rs 2,319 a piece. RIL contributed 126 points to the Nifty rally of 171 points. Currently, the market capitalisation of RIL stands at $207.87 billion or Rs 15.3 lakh crore.

Market experts are of the view that the re-raiting of the stock could continue as long as there are more announcements with respect to the stake sale in Reliance Retail.

Deepak Jasani, head – retail research, HDFC Securities, said, “The stock of RIL is benefitting after a deal it made with respect to Reliance Retail and in anticipation that there will be more such announcements on stake sale for the retail arm which has resulted in the re-rating of the stock but the number of announcements and valuation is something that market participants are waiting to know. The re-rating of the stock can continue till such deal announcements will keep on happening or the stock markets begin to fall.”

Over the years, shares of RIL have outperformed the benchmark. RIL shares have returned 91.13% over the last one year while the benchmark Nifty50 has returned at 4.06%.

Similarly, a comparison between returns from RIL and Nifty over a period of three as well as five years shows that the giant has beaten the benchmarks consistently. The Nifty’s returns in the last three and five years stood at 15.24% and 47.01%, whereas, RIL during the same period gave its investors returns of 185.95% and 438.85%.

With the select few company stocks driving the returns in the stock markets, the investable universe in the stock markets is set to get narrow. In a recent report, the french investment bank BNP Paribas, said that from 2014 till date, close to 78% of the market rally has been driven by select stocks. “Our evaluation of Nifty returns over the last 18 years showed that the market has been getting narrower as fewer stocks drove a large part of the market performance, showing a lack of confidence in mid and small cap names. We do not see this trend reversing anytime soon,” said BNP Paribas.