RIL stock prices have witnessed a significant rise in prices since August. According to a recent report by JP Morgan, RIL stock added $40 billion to RIL’s market value in the last five months.
Well, to be honest, it is not easy to draw investors attention, but RIL owner, Mukesh Ambani, has a real knack of doing business. He always comes up with something which eventually paves a way for his benefits whether it is consumers or investors.
So what is the real story of a spectacular $40 billion bull run despite the debt of Rs. 2.9 lakh crore or $ 41.2 billion?
Let’s find out.
According to a recent report by JP Morgan, positive stream of news has helped the RIL stock.
“We think investors would like to see completion of the various de-leveraging transactions – refining stake sale, completion of InvIT transactions, strategic investors in Jio/retail; that RIL initiated in the second half of last calendar year,” said a report by J P Morgan which has a neutral rating on the stock.
Also, one of the reasons for the surge in blue-chip stocks like RIL has been the lack of options for investors. Investors, including mutual funds, have been averse to risky, small companies — allowing a premium for established names in the stock market.
The stock rallied by a sharp 30% from August last year after chairman Mukesh Ambani said that Saudi Aramco will infuse as much as $15 billion to acquire 20% of stake in refining and petrochemical business.
The company values Jio at $65 billion and retail at $35 billion, according to JP Morgan. So there has been a steady stream of good news in both of its consumer businesses.
So all this paves the way for high prices for RIL stock.