Why are Reliance shares trading higher today

Snapping two sessions gaining streak, shares of Reliance Industries (RIL) rose over 2% on Thursday on the back of strong volume trade. In the first two hours of trade so far, RIL shares gained as much as 2.3% to ₹2,644.30, with 2.18 lakh shares changing hands over the counter on the BSE against two-week average volume of 2.14 lakh stocks. The market capitalisation increased by ₹27,468 crore to ₹17.76 lakh crore.

Early today, RIL share price opened a tad lower at ₹2,576 against the previous closing price of ₹2,584.80 on the BSE. However, the index heavyweight soon pared losses and climbed as much as 2.65% from day’s low amid spurt in volume trade.

At the current price level, RIL shares trade 21% higher than its 52-week low of ₹2,180 hit on March 20, 2023. The stock is just 4% lower than its 52-week high of ₹2,754.70 level touched on December 1, 2022.

In the last one year, RIL shares have underperformed BSE Sensex as the blue chip stock has added 8% as compared to 23.5% growth in the BSE benchmark, Sensex. It has risen 2% in the past six months versus 7% rise in the Sensex. However, the stock seemed to have gained momentum in the recent past by surging 13% in three months and 6% in a month as against 10% and 4.5% growth in the Sensex during the same periods.

RIL shares saw a surge in buying today amid a media report that Reliance Jio, the telecom arm of the conglomerate, is in talks with Finland-based Nokia to sign a $1.7 billion (around ₹14,000 crore)  deal for supply of 5G network equipment. 

With intense competition from rival telco Bharti Airtel, Jio is pushing hard to ramp up 5G infrastructure in the country. It aims to build a strong pan-India 5G network and ensure a countrywide 5G rollout by the end of 2023. For this, Jio has committed an investment of ₹2 lakh crore. It has also entered into a strategic alliance with global players, including Swedish telecommunications company Ericsson and Finnish telecommunications firm Nokia, to develop a 5G network in India.

Last October, Jio hired Nokia as a major vendor to supply 5G Radio Access Network (RAN) equipment from its comprehensive AirScale portfolio countrywide in a multi-year deal. Under the contract, Nokia will supply equipment from its AirScale portfolio, including base stations, high-capacity 5G Massive MIMO antennas, and Remote Radio Heads (RRH) to support different spectrum bands, and self-organising network software. Reliance Jio plans to deploy a 5G standalone network, which will interwork with its 4G network. The network will enable Reliance Jio to deliver advanced 5G services such as massive machine-to-machine communications, network slicing, and ultra-low-latency.

Adding to it, Jio also inked a $2.1 billion worth of contract with Ericsson in October last year for 5G RAN deployment in the country. Reliance Jio is India’s number one mobile operator and has one of the largest RAN footprints in the world.

These deals were signed following the allocation of 5G spectrum, where Mukesh Ambani's Reliance Jio bagged spectrum worth ₹88,078 crore. Jio was the top bidder and secured 24,740 MHz of airwaves across five bands, which was nearly half of all the airwaves in India’s biggest ever 5G spectrum auction.

In October last year, Jio launched the 5G Beta trial in Mumbai, Delhi, Kolkata, and Varanasi. Later on, it launched 5G services in Delhi-NCR, Hyderabad, Mumbai, and Bengaluru, followed by 11 cities across the country, including Lucknow, Trivandram, Mysuru, Nashik, Aurangabad, Chandigarh, Mohali, Panchkula, Zirakpur, Kharar and Derabassi. By December 2023, the company aims to deliver Jio 5G to every town, every taluka, and every tehsil of the country.

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