Reliance Group, which is led by Anil Ambani, has risen by 1,000% to take its market cap to nearly Rs. 8,000 crores. It has taken the group less than 3 months to achieve this feat. Earlier in march, Reliance Group’s market cap stood at Rs. 733 crores. By May 2021, the company’s market cap jumped to a whopping Rs. 3,890 crores and by the end of the recent trading week in June – June 18, 2021- the company’s market cap stands high and mighty at Rs. 7,866 crores.
Details
The shares of companies in Reliance Group, led by the ‘other’ Ambani brother – Anil Ambani – have been performing exceptionally well. While the thunder is often stolen by the port industry behemoth Adani Group, given the bullish streak of its companies, Reliance Group is certainly flying low in the radar and performing well since the past few months.
For the uninitiated, the Anil Ambani led group boasts one of the largest family of shareholders in the country. Currently, the group enjoys the trust of 50 lakh retail shareholders cumulatively with 33 lakh shareholders in Reliance Power, 9 lakhs in Reliance infrastructure, and remaining 8 lakhs in Reliance capital.
As to why and how the group has witnessed an explosive growth of 1000%, we have to lookback and register the positive developments that may be a reason to that growth.
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Why Reliance Infra is growing?
Once a slump in the share market, Reliance Infra is on the brink of a new chapter of its journey. The company recently announced that Promoter group and the PE fund will come together and invest Rs. 550 crores in the company. This news proves that investors and promotors have faith on reliance infra still. The Rs. 550 crores will be an influx that will strengthen the company’s financials. Meanwhile, it should be noted that the promoters’ contribution will make 23% of the company’s stake available to them.
On December 31, 2020, the shares of Reliance Infra were trading at Rs. 26.85. At the time of writing this article, shares of Reliance Infra are trading at Rs. 106.50
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Why Reliance Power is growing?
Reliance Power– part of the Reliance Group slew of companies – is also registered to be cutting down its debt significantly in the coming months. To do just so, the company announced issue of shares and warrants to its promotor – reliance infrastructure. This will lead to Rs. 1,325 crores of debt to be converted into equity.
On December 31, 2020, the shares of Reliance Power were trading at Rs. 3.40. At the time of writing this article, shares of Reliance Power were trading at Rs. 16.60.
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Why Reliance Capital is growing?
A positive development for Reliance Capital came in the form of finalizing buyer for its smaller subsidiary called Reliance Commercial Finance. Recently it was announced that Authum Investment & Infrastructure emerged as the biggest bidder at Rs. 9017 crores. Reliance Capital’s another subsidiary called Reliance Housing Finance Limited has also found a potential buyer in Authumn Investment with the latter bidding Rs. 2,8887 crores.
On December 31, 2020, the shares of Reliance Capital were trading at Rs. 12. At the time of writing this article, the shares of Reliance Capital were being traded at Rs. 27.10.
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Reliance Group – The Collective Growth
Market cap of all the major companies in the Reliance Group – Reliance Infra, Reliance Power & Reliance Capital have doubled in the last 20 days. Moreover, the market cap of Reliance Infra stands at Rs. 2,767 crores, Reliance Power at Rs. 4,446 crores and Reliance Capital at Rs. 653 crores.
