Later today, the board of Reliance Industries Ltd (RIL) will make a decision about the company's sixth bonus share issue, the first since 2017. RIL is a large oil-to-telecom company. The business managed by Mukesh Ambani has suggested distributing bonus shares in a 1:1 ratio because the scrip has increased in value by several times over the last five years and is now trading over Rs 3,000.
RIL's previous bonus issue was in 2017, and since then, the share price has increased by 318 percent, from Rs 725.65 on September 7, 2017, the day it became ex-date for the 1:1 issuance, to Rs 3,029.80 on Wednesday. A comparable bonus share ratio was disclosed by Reliance Industries for its 2009 offering. The ex-date of the shares was November 26 of that year.
In a 1:1 ratio, the 1997 bonus edition was announced. Bonus shares were provided in 1980 in a 3:5 ratio and in 1983 in a 6:10 ratio.
As of now in 2024, Reliance Industries' stock has increased by 17%, while the BSE Sensex has increased by 14% within the same time frame. On July 8, the RIL stock reached a 52-week high of Rs 3,217.90. Analyst sentiment on the stock is neutral to positive following the recent increase.
In a report dated August 29, Bernstein stated that Reliance Industries is more of an India theme, with telecom and retail driving development as O2C consolidates. This firm increased its target price for RIL to Rs 3,440 in response to Reliance Jio's higher valuations following rate increases. By CLSA, the stock is valued at Rs 3,300. For the stock, Jefferies has set a target price of Rs 3,530. Morgan Stanley values the shares at 3,416 rupees.
Conversely, ICICI Securities maintained a cautious attitude on Reliance Industries because to high multiples, subdued free cash flow yields, and return ratios, even though they were anticipating a 14.2% increase in profits per share during FY25–27 and the 1:1 bonus issue. It recommended setting a goal for the RIL shares of Rs 2,970. With a 'Hold' rating and a SoTP target price of Rs 3,213, Antique company Broking stated that it is still neutral on the company since it thinks the majority of the apparent growth has already been discounted.
In the past ten months, every significant RIL selling event has concluded just below the 100-day moving average (EMA) level, which is presently around Rs 2,958. The currency finished at Rs 3,031.95, on Wednesday.
Following a decline from its 52-week high level, JM Financial indicated in a technical report that the Reliance Industries stock has been creating a pattern of higher top higher bottom, a positive formation.
According to the brokerage, the stock has begun trading above both its major long-term and short-term moving averages, indicating that more strength is likely to come.
Reliance Industries has disclosed five rights offerings in its listing history in addition to bonus issues. No stock split occurred.
