The share price of Reliance has dropped by 50% on trading apps today
Karnataka News
Reliance Industries Ltd (RIL) Shares opened at Rs 1,338 on Monday, appearing nearly 50% lower than Friday’s close of Rs 2,655.45 on the Bombay Stock Exchange (BSE). This sharp price drop confused many investors across trading apps. However, the apparent decrease isn’t a sign of any market loss; instead, it’s due to RIL’s recent 1:1 bonus share issue.
Despite the lowered opening price, RIL shares saw a modest gain, with the adjusted share price increasing by 0.77% on Monday. The bonus issue provides shareholders with an additional share for every share they own. To accommodate the increase in outstanding shares, the stock price is adjusted to roughly half its original value. This price adjustment ensures the company’s market capitalization remains stable while the increased share count boosts liquidity. Bonus shares also allow smaller investors to participate more easily as each share becomes more affordable.
The 1:1 bonus issue is RIL’s sixth, representing the largest in Indian stock market history. Since its last bonus issue in 2017, RIL shares have grown 266%, closing last Friday at Rs 2,655.45—a significant jump from its 2017 price of Rs 725.65. This steady rise highlights RIL’s financial strength, resilience, and ability to create long-term shareholder value. Over the years, RIL’s strategic investments in telecommunications, retail, and green energy have contributed to its robust performance, drawing investors’ interest and consistently increasing its shareholder base.
RIL’s recent bonus issue follows the company’s history of rewarding shareholders, and market experts anticipate continued growth, particularly given the company’s expansion into emerging industries like renewable energy. As a result, investor confidence in RIL remains high, positioning the stock as an attractive investment for both new and seasoned market participants.
Previously, Reliance Industries Ltd (RIL) announced a 1:1 bonus issue in 2009, following similar issues in 1997. Earlier bonus issues included a 6:10 ratio in 1983 and a 3:5 ratio in 1980. Alongside these bonus distributions, RIL has completed five rights issues, the latest being in May 2020. Additionally, in July 2023, RIL demerged from Jio Financial Services Ltd, signaling its ongoing efforts to streamline its business structure.
Analysts maintain a generally optimistic to neutral outlook on RIL stock. While growth in some segments, such as refining and petrochemicals, may slow, the telecom and retail divisions show strong potential. According to PL Capital Institutional Equities, Jio’s Average Revenue Per User (ARPU) rose by 7% quarter-on-quarter to Rs 195, with further growth anticipated following a recent tariff hike. Similarly, RIL’s retail segment is expected to maintain stable performance.
RIL is also channeling significant investment—approximately Rs 75,000 crore—into its new energy business. While this venture’s returns are not yet factored into current earnings estimates, analysts project that more clarity on RIL’s green energy initiatives could positively impact its long-term growth trajectory.
JM Financial notes that RIL aims to expand revenue through Jio and retail operations over the next three to four years. The company’s emphasis on green energy and recent changes in telecom tariffs will likely reinforce its market position. RIL’s commitment to sustainable growth aligns with broader market trends, reflecting a shift towards renewable energy investments.
The share price adjustment following the recent bonus issue is a standard recalibration. It increases the outstanding share count and thereby makes each share more affordable for retail investors. This adjustment improves RIL’s market liquidity, making it accessible to a broader investor base.
RIL shares have slightly dipped, falling around 10% over the past month. However, year-to-date, they are up by 2.53%, while the BSE Sensex has risen by 9.87% in the same period. This recent fluctuation notwithstanding, RIL’s long-term solid performance remains anchored by its diversified investments across telecom, retail, and green energy.
