RIL shares edge higher ahead of board meeting to consider bonus issue

Shares of Reliance Industries (RIL) rose nearly 1% in opening trade today, ahead of its board meeting to consider a bonus issue of shares. The sentiment was further boosted amid a report that the oil-to-telecom conglomerate has bagged an award to build a 10 gigawatt hour (GWh) battery storage project under the government's Production-Linked Incentive (PLI) scheme.

Extending gains for the second day, RIL shares opened higher at ₹3,039.45 after ending 0.34% higher at ₹3,029.80 in the previous session. In the opening trade, the country’s most valued stock gained as much as 0.7% to ₹3,052.05 per share, while the market capitalisation climbed to ₹20.53 lakh crore.

As per the exchange data, Reliance shares touched its 52-week high of ₹3,217.90 on August 8, 2024, and a 52-week low of ₹2,221.05 on October 26, 2023. In the last one year, RIL shares have delivered over 25% returns to its shareholders, in line with BSE benchmark Sensex. The blue-chip stock has risen 1% in six months and added 17% in the calendar year 2024. In the last one month, the counter has seen a rise of 5%.

RIL Chairman and Managing Director Mukesh Ambani, in the company’s 47th AGM on August 29, had announced that the board would consider a 1:1 bonus share at its meeting on September 5. If approved, this will be the third bonus issue by the company after 2009 and 2017, when the conglomerate issued bonus shares in the ratio of 1:1. This means a shareholder will get one additional share for every share they already own.

"Reliance Industries has sent a notice to the stock exchanges that the board of directors will meet on September 5 to consider issuing bonus shares in the ratio of 1:1. When Reliance grows, we reward our shareholders handsomely. And when our shareholders are rewarded handsomely, Reliance grows faster and creates more value. This virtuous cycle has been the guarantor of your company’s perpetual progress," said Ambani at the AGM.

Reliance Industries has been consistently paying dividends to its shareholders over the last five years. Last year, it paid a dividend of ₹19 for the full financial year 2023-24, including ₹10 in the March quarter. 

As per the RIL’s annual report released last month, Reliance has consolidated its balance sheet after the previous round of capex and is ready for the next level of growth. “Our constant endeavor to find solutions for India and Indians has helped us spot multiple growth opportunities that have expanded our business portfolio. This portfolio now enables us to touch the lives of millions of Indians through multiple products and offerings,” Mukesh Ambani, Chairman and Managing Director of RIL, wrote in the annual report, which was released on August 7.

For the first quarter of the fiscal (Q1 FY25), RIL reported a 5.5% year-on-year drop in its net profit at ₹15,138 crore as compared with ₹16,011 crore in the year-ago period. Revenue from operations rose 12% to ₹236,217 crore in the first quarter as against ₹210,831 crore in the corresponding quarter last year. EBITDA increased by 2% year-on-year to ₹ 42,748 crore. Post Q1 FY25, Motilal Oswal reiterated ‘BUY’ call on RIL with a target price of ₹3,435, while Nuvama gave a ‘Buy’ call with a revised 12-month price target of ₹3,786. 

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