logo
 

Irrational exuberance in RIL stock

Thu 23 Feb 2017, 20:46:26
Is Reliance Jio Infocomm Ltd worth $5.8 billion more in one day? The Reliance Industries Ltd (RIL) stock had moved up 1.4% on Tuesday when its chairman and managing director Mukesh Ambani announced (during market hours) Reliance Jio’s decision to start charging its subscribers from 1 April. However, the RIL stock’s 11% jump on Wednesday has left many analysts shell-shocked. The rise meant that the company’s market capitalization increased Rs38,732 crore (or $5.78 billion) in a single day.
That’s at a time when analysts feel that the stock



was pricing in an implied negative equity value for the telecom business earlier. Some analysts believe that rumours about a strategic investor in Reliance Jio or possibilities of listing the firm separately may have boosted the stock.

Nevertheless, Reliance Jio’s announcement removes a key overhang for the RIL stock. “Over the last few weeks, a key investor concern was the possibility of Jio extending its free offer period or starting with nominal tariffs at the onset,” analysts from Goldman Sachs wrote in a note.

No Comments For This Post, Be first to write a Comment.
Leave a Comment
Name:
Email:
Comment:
Enter the code shown:


Can't read the image? click here to refresh

Todays Epaper

neerus indian ethnic wear
Latest Urdu News

Do you think opposition presidential candidate Yashwant Sinha will win the election?

Yes
No
Can't Say