Reliance Industries gains 3%, hits new peak; m-cap nears Rs 18 trillion

Mukesh Ambani-controlled RIL's combined market-cap (partly and fully paid shares) stands at Rs 17.66 trillion

Shares of Reliance Industries (RIL) hit a new high of Rs 2,658, surging 3 per cent on the BSE in Friday's intra-day trade. The stock has gained 4 per cent in the past two trading days after the company's retail arm, Reliance Retail, announced to launch 7-Eleven stores in India.

On Thursday's Reliance Retail Ventures Limited (RRVL), through its wholly owned subsidiary, 7-India Convenience Retail Limited, entered into a master franchise agreement with 7-Eleven, Inc. for the launch of 7-Eleven convenience stores in India.

"The first 7-Eleven store is set to open on Saturday, October 9 in Andheri East, Mumbai. This will be followed by a rapid rollout in key neighborhoods and commercial areas, across the Greater Mumbai cluster to start with," Reliance Retail said in a press release.

The 7-Eleven stores aim to provide shoppers with a unique style of convenience, offering a range of beverages, snacks and delicacies specifically curated to appeal to local tastes, along with refill of daily essentials, having affordability and hygiene at its very core, it added. RRVL is a subsidiary of RIL and holding company of all the retail companies under the RIL Group.

In a separate development, Reliance Industries also launched its premium retail mall, Jio World Drive (JWD), in Mumbai on Thursday.

Spanning an area of 17.5 acres at Maker Maxity and strategically located in the Bandra Kurla Complex, Jio World Drive is home to 72 prominent international and Indian brands, 27 culinary outlets with cuisines from across the globe, Mumbai’s first rooftop Jio Drive-In Theatre, an open-air weekend community market, pet-friendly services, a dedicated pop-up experience and other bespoke services.

Meanwhile, in the past three weeks, the stock of RIL has outperformed the market by surging 11 per cent, as compared to a 1.8-per cent rise in the S&P BSE Sensex. A sharp rally in the stock price of the RIL has propelled the market capitalsation of the company near Rs 18 trillion. The Mukesh Ambani-controlled RIL, now, has a combined market-cap (partly and fully paid shares) of Rs 17.66 trillion on the BSE, the exchange data shows.

"With telecom tariff hikes around the corner, stronger refining on higher diesel and Jet Kero cracks, and sharply higher upstream (gas prices and volumes), we believe RIL's earnings downgrade cycle is likely over for now," analysts at JPMorgan said in a note.

The  brokerage firm said it does not yet see an upgrade cycle, but believe in a market awash with flows, the positive news cycle should keep the stock supported given its large index weight and significant one-year underperformance.

The key news flows which could support the stock price are telecom tariff hikes; progress on the long delayed O2C stake sale to Aramco (markets would likely prefer an all cash deal vs a stock swap); large investments in renewables and increased visibility on the progress of the renewable foray. "We currently ascribe an equity value to the renewable foray of $10bn, which at this point is more of an option value given there is unlikely to be any revenues or profits for the next two to three years," the brokerage firm said. The stock was, however, trading above the brokerage's target price of Rs 2,465.