Mukesh Ambani, Chairman of Reliance Industries
The board of directors of Reliance Industries Limited (RIL) will today decide on the company’s sixth bonus issue of shares, which is the first since 2017. The Mukesh Ambani-led company has proposed issuing bonus shares in the ratio of 1:1 as the stock has given multiple returns in the last few years and is trading above the Rs 3,000 level.
The share price was then Rs 725.65.
RIL’s last bonus issue was in 2017 and since then the stock has surged 318 per cent to Rs 3,029.80 per share on Wednesday from Rs 725.65 on September 7, 2017, the day it went on sale for the 1:1 issue. Reliance Industries had announced a similar bonus share ratio for its 2009 issue. The 1983 bonus shares were vested in the ratio of 6:10 and that of 1980 was vested in the ratio of 3:5.
Reliance Industries shares have gained 17 per cent so far in 2024, while the BSE Sensex has gained 14 per cent in the same period. On July 8, RIL shares hit a 52-week high of Rs 3,217.90. After the recent surge, analysts are neutral to positive on the stock.
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Bernstein said in an Aug. 29 note that Reliance Industries has an India theme, where retail and telecom will drive growth while O2C will consolidate. The brokerage raised its target for RIL to Rs 3,440 on the back of the higher valuation given to Reliance Jio after the tariff hike. CLSA values ​​the stock at Rs 3,300. Jefferies has set a target price of Rs 3,530 for the stock. Morgan Stanley sees the stock at Rs 3,416.
On the other hand, despite 14.2 per cent growth in earnings per share in FY25-27 and expectations of 1:1 bonus issue, ICICI Securities maintained a cautious stance on Reliance Industries due to high multiples, free cash flow yield and return ratio. It suggested a target of Rs 2,970 for the RIL stock. Antique Stock Broking said it remains neutral on the stock with a ‘Hold’ rating and a SoTP target price of Rs 3,213.
