It took exactly 40 years for Reliance Industries to reach 6 lakh crore in market capitalisation on November 1, 2017. But adding another 6 lakh crore took less than four years.
RIL has transformed itself into a consumer company from a materials and energy producer, crossing 12 lakh crore in market capitalisation on Monday — two days ahead of its 43rd annual general body meeting. Its market cap now is more than double that of the country’s all telecom, retail and refinery stocks put together.
With Monday’s 3 per cent jump, Mukesh Ambani’s wealth has risen by $2.36 billion to $72.5 billion, making him the world’s eighth richest person — overtaking Alphabet co-founder Sergey Brin.
The RIL stock has outperformed the Sensex by surging 28 per cent so far this year, compared with an 11 per cent decline in the benchmark index.
Separately, Credit Suisse raised the price target for RIL, factoring in a higher enterprise value of Jio at $88.5 billion. The non-wireless operations of Jio include health, education, agri-tech, home broadband, enterprise services, Internet of Things and Jio’s app suite.
“Our view is that Jio has competitive advantages with its full stack of services in many verticals, like online health and education. Many of these verticals can be scaled up significantly,” Credit Suisse said in its report.
Addressing shareholders in 2019, Ambani had said that the day was not far when the share of consumer businesses would be 50 per cent. Few believed him, and many were bewildered. The only consumer business that RIL was then running was organised retail and no one had any inkling of what the company was planning to do with the broadband spectrum it had bought.
Jio and the retail platform have collectively contributed nearly a third to the consolidated earnings before interest, taxes, depreciation and amortisation (Ebitda) of RIL in FY20. RIL’s consumer-facing businesses have shown exponential growth, with Reliance Retail becoming India’s biggest retail company, with revenue of Rs 1.63 lakh crore for FY20 and Ebitda of Rs 9,654 crore.
The digital services business had reported unprecedented performance. In the first full year of operation, the company reported net profit of Rs 723 crore on gross revenue of Rs 23,714 crore in FY18. By FY20, the gross revenue nearly trebled to Rs 68,462 crore and net profit was up more than sevenfold to Rs 5,562 crore.
Simultaneously, Jio Platforms has become the biggest investment drawcard, raising nearly Rs 1.2 lakh crore from Facebook and the biggest names in global finance.
Today, Reliance Retail is India’s largest organised retailer operating 11,784 stores across 6,600-plus towns. With 388 million subscribers, Jio has become a digital service provider of choice for around one fourth of the Indian population and made India the global leader in broadband data consumption.