Reliance: Is it right time to invest in India’s most valued firm?

Reliance shareholders will have to pay only 25 per cent for subscribing to the company's rights issue, balance will have to be paid in two installments
India's most valued firm

Reliance Industry is the largest company by market capitalisation in India. Conglomerate’s stock has rallied more than 600 points from its march low and is consistently outperforming index Nifty. In per cent terms, it comes around 76.57 per cent massive rally in the counter.After missing a massive rally in this blue chip stock, now everyone is thinking is it the right time to invest in India’s most valued firm?

Reliance Industries had registered a 52 week low on closing basis at 884.05 on 23 March 2020. Since then it is showing a persistent up trend.If we see last month returns, Reliance shares have given 30 per cent positive return at a time when index Nifty have witnessed 3 per cent correction. Rally in the counter is driven initially by recovery in the overall stock market and subsequently by investments led by global leaders in Jio platforms.

After missing a massive rally in reliance industry, now everyone is thinking is it right time to invest in India's most valued firm?
Returns: Reliance Industry vs Nifty

Key Highlights about Reliance Industry in recent days:

7 April: The scrip jumped 11.89 per cent to close at Rs 1,206.40 on the BSE. During the trade, it rose sharply by 12.56 per cent to Rs 1,213.70.

22 April: Shares of Reliance Industries jumped over 8 per cent after Facebook announced an investment of USD 5.7 billion (Rs 43,574 crore) to buy a 10 per cent stake in Jio Platforms.

Reliance Jio has come up with new top-up plans to support extra data usage at up to 75 per cent lower rates and also made annual recharge plans 33 per cent cheaper compared to rivals by enhancing data usage limit at 4G speed to 2 GB per day.
Reliance Jio

23 April: Facebook deal to help Reliance monetise platforms, deleverage: Fitch

Facebook’s investment for a 9.99 per cent stake in Jio Platforms is the single-largest FDI in the Indian telecoms and technology sector.

30 April:The company’s board approved a rights issue of Rs 53,125 crore, which it said was the biggest in India and the first by RIL in three decades.

Net profit in January-March slipped 37 per cent to Rs 6,546 crore, the lowest in three years.

4 May: Silver Lake – one of the world’s largest tech investors agreed to invest Rs 5,655.75 crore to buy a 1.15 per cent stake in billionaire Mukesh Ambani’s digital unit jio platforms.

9 May : Reliance Jio’s parent firm Jio Platforms has raised Rs 60,596.37 crore in less than three weeks by selling a stake of around 13 per cent to Facebook, Silver Lake and Vista.

On looking at charts, Reliance shares have witnessed V shape recovery in prices. At a current value of 1561.8, shares are overbought on RSI and stochastic.It is consistently trading above 26 days EMA in the last two weeks.It is expected to find strong resistance close to its recent high of 1617.55.

After missing a massive rally in reliance industry, now everyone is thinking is it right time to invest in India's most valued firm?
Reliance Industry

Monday, RIL may open a gap up on recent trending reports from Bloomberg about interest from Saudi Arabia’s wealth fund and a prominent American firm for possible investment in Jio platforms.In the coming days stock is expected to witness some profit booking and likely to consolidate for a while before showing breakout in either way.

Only High risk appetite individuals can risk to enter into the RIL if RIL breaks above 1617 decisively for short term gain considering overall economic situation and market trend in COVI-19 pandemic.

On the contrary , sellers will dominate if the counter closes below 1500, the level from which it showed a recent breakout and  from where it had witnessed  sharp correction.

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