RIL Announces Bonus Shares: Key Details and Market Analysis

Reliance Industries Limited (RIL), the prominent oil-to-telecom conglomerate led by Mukesh Ambani, is preparing for a major announcement today. The company's board is expected to reveal a bonus share issue at a 1:1 ratio. This move will mark RIL's sixth bonus issue and the first since 2017.

RIL's stock has demonstrated significant growth in recent years and is currently trading above Rs 3,000. Since the last bonus issue in 2017, the share price has surged by an impressive 318%, climbing from Rs 725.65 on September 7, 2017, to Rs 3,029.80 as of Wednesday.

As of September 5, 2024, RIL's share price was trading slightly lower, down 0.15% at Rs 3,025.35 on the BSE.

Historically, RIL has rewarded its shareholders with bonus issues on several occasions. The previous bonus issues occurred in 2017 (1:1 ratio), 2009 (1:1 ratio), 1997 (1:1 ratio), 1983 (6:10 ratio), and 1980 (3:5 ratio). The company has also issued rights shares five times since its listing but has never executed a stock split.

In 2024, RIL's shares have outperformed the broader market, showing a 17% increase compared to the BSE Sensex's 14% rise. The stock hit a 52-week high of Rs 3,217.90 on July 8.

Analysts' Views on RIL’s Stock Performance

Market analysts have diverse perspectives on RIL's future prospects. Bernstein recently upgraded its target price for RIL to Rs 3,440, noting that "Reliance Industries is positioned as a key player in India’s retail and telecom sectors, driving future growth while O2C consolidates." Other major brokerages have set their target prices between Rs 3,300 and Rs 3,530.

On the other hand, some analysts adopt a more cautious outlook. ICICI Securities, while acknowledging potential earnings growth, has set a target price of Rs 2,970 due to "high valuation multiples, subdued free cash flow yields, and return ratios." Antique Stock Broking remains neutral with a target price of Rs 3,213.

From a technical analysis standpoint, JM Financial observed that RIL's stock has been forming a "higher top, higher bottom" pattern, indicating a bullish trend. The stock has also begun trading above its key long-term and short-term exponential moving averages (EMAs), suggesting potential continued strength.

Disclaimer: The opinions and forecasts presented are those of individual analysts or brokerage firms and do not reflect Mint’s views. Investors should consult certified experts before making any investment decisions.

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