Reliance Industries Limited (RIL), led by Mukesh Ambani, has made a significant leap in the global market by becoming the 49th most valuable company worldwide. This achievement is marked by its market capitalization reaching Rs 20 lakh crore, a first for any Indian company listed on the stock exchange. This places RIL in the league of globally recognized corporations like Netflix Inc and Accenture PLC-A, highlighting the impressive growth journey RIL has embarked on in recent years.
In less than half a decade, RIL has managed to double its market cap from Rs 10 lakh crore, a testament to its strong foothold in sectors such as telecom, retail, and oil-to-chemicals. The company first crossed the Rs 1 lakh crore market cap in August 2005 and reached Rs 10 lakh crore in November 2019.
Mukesh Ambani, RIL’s chairman and the richest person in Asia, has seen a significant increase in his personal wealth due to the rise in RIL’s shares. As per Bloomberg’s Billionaire Index, Ambani’s net worth is approximately $109 billion. He is closely followed by Gautam Adani, who has a net worth of $99.4 billion, making him the second wealthiest individual in Asia.
In the global market scenario, RIL’s achievement stands out, especially when compared to companies like Microsoft Corp, Apple Inc, and Saudi Arabian Oil, which lead with market caps of $3.086 trillion, $2.89 trillion, and $2.04 trillion respectively.
Among Indian companies, Tata Consultancy Services (TCS), a leading company of the Tata Group, follows RIL with a market cap of Rs 15.18 lakh crore. The country’s largest lender, HDFC Bank, holds the third position with a market cap of Rs 10.59 lakh crore.
RIL’s shares reached a record high of Rs 2,975.80 on the Bombay Stock Exchange (BSE) on Tuesday, pushing its market capitalization to an all-time high of Rs 20.01 lakh crore during intraday trading. The day ended with RIL’s shares at Rs 2,928.95 each, resulting in a market cap of Rs 19.81 lakh crore.
The recent increase in RIL’s shares, which have risen by over 13% in the early weeks of 2024, is attributed to positive assessments of the company’s peak capital expenditures and strong performance in its retail segment. The upcoming merger with Walt Disney’s India unit and the expected split of RIL’s retail and digital arm are seen as additional factors boosting investor confidence.
Elaboration of complex terms:
Market Capitalization: It is the total market value of a company’s outstanding shares of stock. It is calculated by multiplying a company’s shares outstanding by the current market price of one share.
Intraday Trading: This refers to the practice of buying and selling financial instruments within the same trading day. In other words, all positions are closed before the market closes for the trading day.
Capital Expenditures: These are funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment.
Demerger: This is a corporate restructuring in which a business division, subsidiary, or other part of a company, is broken off from the main company to become an independent company.