Vodafone-Idea: What went wrong?
Mergers and acquisitions can turn the eyes of stock market investors towards the possible action that such large-scale actions can bring to the futur…
28 Dec, 2020
6 min read
25390 Views
Reliance Industries Limited (RIL) is India’s largest publicly traded company. Read on to know more about history of Reliance stocks and it’s rise in the Market.
Reliance Industries Limited (RIL) is India’s largest publicly traded company and became the first-ever Indian company to exceed US$150 Billion in market capitalization. Its shares trade slightly under ₹2,000 today whereas a decade ago, one could purchase it for about ₹500. Here’s what RIL’s stock looks like over the past 10 years.
Surprisingly, most of its gains started around 2018 and the price saw a sudden spike only this year. Read on to find out what steps Reliance took and the factors that contributed to its success.
Strong Fundamentals
Reliance entered the 2010s as a formidable player with a few key businesses that were already a force to reckon with. All of its most prominent businesses today; namely, petrochemicals, retail, and telecommunications had their seeds sown between 2010-2015.
The company’s energy division got a boost after forging a partnership with BP to capitalize on the latter’s deepwater exploration capabilities. This move aimed at securing the energy security of India and further cemented Reliance’s reputation as a titan in India’s energy space.
The company had also started working on a 5-year plan to expand its retail operations and went on a spree of establishing retail huge outlets. This strategy of focusing on hypermarkets to drive growth worked well for it in the initial years and culminated in it becoming India’s largest retailer by revenue in 2014.
With the advent of 4G in the Indian market, Reliance made a preemptive move by acquiring Infotel Broadband Services Limited, the only successful bidder for nationwide 4G spectrum auction held by the Indian government. This move allowed it to disrupt the telecommunications market and in acquiring a 33% market share by 2020.
New Beginnings
By 2015, Reliance was on the cusp of ramping up its business across its verticals. Since most of this was happening behind the scenes, its shares remained stagnant for a few years already. By 2017 however, the prices started climbing rapidly. Between 2017-2019, the share prices had tripled and the company’s prospects were brighter than ever.
Reliance Jio (RIL’s telecommunications wing) was launched towards the end of 2016 and disrupted the 4G data services market by offering voice and data services at rates as low as ₹300 a month. This no-holds-barred approach to conquering the telecom market paid off as Jio closed 2019 by being the largest telecom operator in India and the third-largest telecom operator in the world with a whopping 405 million subscribers.
Reliance Retail was no slouch either. By 2020, the retail division had a turnover of ₹1,30,566 crore and had earned the distinction of being India’s largest, fastest-growing retailer. This combined with the expansion of the petrochemicals and telecom business saw its stocks trade at ₹1,500 apiece by the end of 2019. However, the best was yet to come.
Building on top of its strong retail and data services, Reliance rounded off 2020 by carving off a separate entity called Jio platforms limited, that would comprise of all digital initiatives and telecom assets. This subsidiary attracted a slew of investments from some of the top technology companies like Facebook, Intel, Google, and Qualcomm. A few private equity firms as well and two sovereign funds participated as well. Jio had raised over US$20 Billion and reduced its net debt burden by almost 90%.
Key Takeaways
At the time of writing this article, RIL’s stock trades at almost ₹1,978, which is 5 times what it was 10 years ago. Reliance’s success was a result of the following traits:
- Strategic Partnerships: RIL partners with the world’s major players to expand their capabilities.
- Disruptive Pricing: Jio and Reliance Retail entered the fray with affordable pricing that appealed to the Indian consumer.
- Building for Scale: All of RIL’s businesses are built to serve large swathes of the Indian market.
- Adaptability: In 4 decades, the company has already pivoted from textiles to petrochemicals to retail. This trait of constantly changing to the needs of the market and diversifying its businesses allows it to stay relevant in today’s turbulent times.
How would you rate this blog?
Related Blogs
Translate the power of knowledge into action. Open Free* Demat Account
Latest Blog
-
07 Apr, 2021
7 min read
The Tata Motors Upheaval Story
The automotive industry has been famously tied to the performance of the extended economy for most countries.
-
15 Jun, 2021
10 min read
A sneak peek at Zomato's IPO plans
Covid-19 came and turned the world upside down – tourism, airlines, fashion, F&B have suffered tremendously but online financial gateways, video conf…
-
08 Jul, 2021
10 min read
The Success Story of Pharmeasy
Today, PharmEasy is a reputable and well-known firm whose aim is to become the best health care delivery platform in India.
-
07 Jul, 2021
10 min read
Ixigo IPO: Ixigo Plans a 750 Crore IPO
Ixigo is a travel portal and it plans to host an IPO of between Rs 1500 crore to Rs 1800 crore later this year.
-
08 May, 2021
8 min read
Adani Ports and its recent rise. Here's why
If you have been following the rise of Adani Ports’ stock price in recent weeks, you are probably curious as to what is driving this growth.
-
06 Jan, 2021
6 min read
Tata Consultancy Services: A story...
Tata Consultancy Services (TCS) is the world’s most valuable IT company. Read this success story of how TCS expanded globally, acquired new verticals…
-
31 May, 2021
7 min read
The Rise of Metal Stocks Amid the 2nd Wave
The past few months have brought with them several changes.
-
15 May, 2021
8 min read
The Best Penny Stocks in India
Investing and trading on the stock market has the potential to generate profits.
-
10 Mar, 2021
7 min read
PVR - a comeback on the cards?
Who doesn’t like to watch movies. But when the COVID pandemic first hit the Indian subcontinent, investors began to withdraw from their investments -…
-
21 May, 2021
8 min read
Asian Paints: 7000% returns in 17 years
Some investment propositions have the ability to make investors – both the newbie and the expert alike – stop and stare.
-
13 Oct, 2021
6 min read
LIC Seeks to Appoint CFO
According to a notice on its website, the state-owned Life Insurance Corporation of India (LIC) is looking for a Chief Financial Officer ahead of an …
-
30 Aug, 2021
7 min read
Should you Invest in the Latest Sovereign...
For the uninitiated, sovereign gold bonds can be understood to be certificates issued and mandated by the Reserve Bank of India.
-
16 Mar, 2021
8 min read
Indiamart’s QIP: behind the scenes
Last year, when the pandemic had hit businesses hard across the globe, most people resorted to the internet to keep their businesses afloat.
-
06 May, 2021
9 min read
Should you place your bets on ITC?
Investors trading on the stock market are advised to focus on maximising their wealth by making shrewd decisions based on the performance and fundame…
-
13 Jun, 2021
7 min read
Soaring commodity prices. Here's why
Prices of commodities in the energy, metal and agriculture sectors have seen a sustained rise in the first few months of this year.
-
06 Oct, 2021
5 min read
Byju’s IPO Plans
Currently, India's most valuable unicorn, online education provider Byju's, is in talks to raise $400 million to $600 million and then expedite plans…
-
24 Feb, 2021
7 min read
Shree Cements: A lesson in Prudence
This article will help you take a deeper look into the rise of Shree Cements, through the lens of it’s stock performance over the past few years.
-
01 Jun, 2021
8 min read
Muted Tata Communications stock in wake...
There is a meme going around that says: Sneezes went from “Bless you” to “To hell with you” real soon.
-
03 Jun, 2021
6 min read
Hotel Stocks on the Rise Despite Lockdown
The hospitality industry suffered a major setback when the prime minister announced a nationwide lockdown for 3 weeks at the end of March 2020.
-
27 Jan, 2021
9 min read
HDFC Bank Ltd’s Journey to becoming the...
As of November 25, 2020, HDFC Bank had hit a market cap of ₹8 Lakh Crore and had become the third company to do so after Reliance and TCS.
-
04 Apr, 2021
7 min read
Dr. Reddy's Laboratories Ltd - Is this...
2020 was a peculiar year, especially in terms of the industries that managed to flourish despite the challenges that the lockdowns and isolation meas…
-
05 Mar, 2021
7 min read
The LIC IPO Game Plan
IPOs have attracted overt attention of retail and institutional investors alike in the recent Indian stock market scene.
-
11 Jun, 2021
7 min read
Stock Picks Based on Q4 Results
As FY21 drew to a close, it was a déjà vu moment as lockdowns (although state-level), and a second wave of the COVID-19 pandemic defined investor beh…
-
24 Aug, 2021
5 min read
Stocks to Watch: NMDC, Tata Motors,...
This article seeks to shed light on stocks that have recently been made available in the market. Included among them is the government’s stake in NMD…
-
05 Oct, 2021
7 min read
LIC IPO: All we Know So Far
While investors await the Life Insurance Corporation's mammoth public offering mostly happening this financial year, why do experts think the IPO has…
-
29 Oct, 2021
7 min read
Sugar Stocks Down as Sensex Falls
Sugar stocks are indicative of important trends in the market. They are also an important cog in the industries sector of the economy. Read on to kno…
-
09 Jul, 2021
9 min read
IPO Alert! Devyani International files...
Against all odds, the Indian market, despite a minor tailspin due to the nationwide lockdowns last year, has seemed to recover relatively well.
-
11 Jul, 2021
11 min read
Go Air IPO: Go Air looks to enter the IPO market
GoAir, one of India’s most popular airlines, is preparing for an initial public offering (IPO). Rebranding itself as “Go First”, the airline filed a …
-
24 Sep, 2021
7 min read
Indian Railways Share Quarterly Results -...
The Indian Railway Catering and Tourism Corporation (IRCTC) is a subsidiary of the Indian Railways.
-
23 Jul, 2021
8 min read
Laurus Labs Share: More than 50% Return...
Shares of pharmaceutical and biotech company Laurus Labs have continued to surge upwards and have hit a new high amounting to INR 599 per share on th…
-
23 Aug, 2021
6 min read
Clean Science, GR Infraprojects IPO...
This article seeks to shed light on initial public offerings (or IPOs) that have recently been up for grabs in the market. Included among them are Cl…
Ready To Trade? Start with
Subscribe to #SmartSauda Newsletter
CONTINUE WITH GOOGLE
CONTINUE WITH FACEBOOK
