Reliance Industries Makes History: Becomes First Indian Company to Hit Rs 20 Lakh Crore Market Cap

In a historic achievement, Reliance Industries Ltd (RIL) has surged ahead, marking a significant milestone by becoming the first listed Indian firm to surpass the coveted Rs 20 lakh crore market capitalization. The oil-to-telecom conglomerate, led by Mukesh Ambani, demonstrated robust market performance, with its valuation reaching Rs 19,93,881.61 crore during the trading session.

Reliance Industries Market Surge and Stock Performance:

Reliance Industries witnessed a remarkable uptrend as its shares surged by 1.88%, reaching a high of Rs 2,957.80 on the Bombay Stock Exchange (BSE). This surge is indicative of RIL's resilience and market dominance. Notably, the recent demerger of its financial services arm, now known as Jio Financial Services Ltd (JFS), further fueled the positive sentiment, with JFS commanding a market cap of Rs 1,70,331.55 crore.

Mukesh Ambani's Fortunes and Global Ranking:

The surge in RIL's market capitalization has significantly impacted Mukesh Ambani's net worth, elevating it to $109 billion. This surge alone contributed a substantial $12.5 billion to Ambani's fortunes in the year 2024. As a result, he now holds the title of the richest individual in India and claims the 11th spot among the world's wealthiest, according to the Bloomberg Billionaire Index.

RIL's Decade-long Transformation:

Over the past decade, Reliance Industries has undergone a transformative journey, evolving from a legacy oil and gas business into an industry leader in telecom and digital services. The company strategically incubated businesses of the future, such as retail and green-energy ventures, positioning itself as a diversified and forward-looking conglomerate.

BNP Paribas Outlook and Valuation:

BNP Paribas, in a recent analysis, lauded RIL's position as an industry leader in telecom and its substantial investments in 5G infrastructure. The brokerage highlighted the potential for RIL to benefit from the rising demand for data in India and the promising outlook for its green-energy initiatives, including solar, batteries, fuel cells, and hydrogen.

Segment-wise Valuation:

• Telecom Business: BNP Paribas values the telecom business at 11 times FY26 EV/Ebitda, recognizing Jio's significant upfront investments and potential from its expansive digital play.

• Reliance Retail: Valued at 35 times FY26E EV/Ebitda, with a 20% discount to leading retail companies due to variations in business mix and disclosure levels.

• Oil-to-Chemicals Division (O2C): Valued at 7.5 times FY26E EV/Ebitda, at a premium to Oil Marketing Companies (OMCs) due to higher refining margins and private ownership.

RIL's Key Highlights:

• RIL's share price climbed nearly 2% on February 13, 2024, pushing its market cap to Rs 19,93,881.61 crore.

• This achievement comes after the recent demerger of RIL's financial services arm, Jio Financial Services Ltd., with a market cap of Rs 1,70,331.55 crore.

• Mukesh Ambani's net worth soared to $109 billion, making him the richest Indian and 11th richest person globally.

Reliance Industries Ltd Transformation Journey:

Over the past decade, RIL has undergone a significant transformation, venturing into high-growth sectors like digital services and retail.

• Telecom Leadership: RIL holds the top spot in the Indian telecom industry, having made substantial investments in 5G technology compared to rivals. Analysts predict RIL to benefit from rising data demand and potential tariff hikes.

• Retail Expansion: RIL's retail arm continues to witness rapid expansion, adding new stores and solidifying its market presence.

• O&G Turnaround: The upstream oil and gas business has witnessed a turnaround with new production from KG-D6 gas fields and improved realizations.

• Green Energy Focus: RIL is exploring promising new ventures in green energy, including solar, batteries, fuel cells, and hydrogen.

Analyst Insights:

BNP Paribas, with a target price of Rs 3,080 on RIL, assigns different valuations to each segment:

• Telecom: Valued at 11 times FY26 EV/Ebitda, reflecting Jio's infrastructure investments and digital play potential.

• Retail: Valued at 35 times FY26E EV/Ebitda, at a discount to peers due to disclosure levels and business mix differences.

• O2C: Valued at 7.5 times FY26E EV/Ebitda, reflecting higher refining margins and private ownership advantage.

• Oil & Gas: Valued at 7 times FY26E EV/Ebitda, at a premium to public sector peers due to lower government interference.

Looking Ahead:

RIL's historic achievement signifies its robust performance and strategic diversification. As the company continues to expand its digital, retail, and green energy businesses, it is well-positioned for further growth and market leadership in the coming years.

Conclusion:

Reliance Industries' remarkable journey to surpass a Rs 20 lakh crore market cap reaffirms its standing as an industry powerhouse. With a diversified portfolio and strategic foresight, RIL continues to shape the landscape of India's business and economy.