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Published: October 31, 2024
Updated: October 31, 2024

Reliance Industries Surprises Investors with Massive 1:1 Bonus Allotment on Dhanteras

Overview of Reliance’s Historic Bonus Announcement

On the auspicious day of Dhanteras, Reliance Industries (RIL), India's largest oil and gas company, made waves in the stock market by allotting nearly 676.62 crore equity shares to its shareholders as part of a 1:1 bonus issuance. This substantial bonus has adjusted Reliance's stock price, which now trades just below Rs 1,350, making it a prime buy recommendation.

Stock Performance and Current Market Standing

On Dhanteras, Reliance’s shares closed at Rs 1,338.95 on the Bombay Stock Exchange (BSE), with a slight uptick of 0.4%. The company’s market capitalization stood at approximately Rs 9.06 lakh crore. Over the past year, the stock has fluctuated between a high of Rs 1,608.95 and a low of Rs 1,136. Currently, it offers a price-to-earnings ratio of 24.80 and a return on equity of 6.97%.

Key Details of the 1:1 Bonus Issue

Reliance’s latest bonus issue is its first in seven years, following a similar 1:1 ratio bonus in September 2017. Under this arrangement, eligible shareholders received one fully paid-up share for every share they already held. Following this massive distribution, Reliance’s total paid-up capital has increased, amounting to over Rs 13,532 crore.

Broker Recommendations and Investment Potential

Brokerage firms remain optimistic about Reliance’s stock, with consensus data from 37 analysts recommending a "BUY." With the recent bonus announcement and adjustments, the projected one-year target price has been set at Rs 1,652.54, representing a potential upside of 23%. Several brokerage firms, including Way2Wealth, have highlighted Reliance as a top Diwali investment pick for the year and anticipate growth across its business segments.

Growth Prospects in Retail and Renewable Energy Sectors

Reliance's retail sector continues to partner with both domestic and international brands, reinforcing its market position. Additionally, the company’s ambitious foray into renewable energy with solar, green hydrogen, bio-energy, and wind solutions positions it at the forefront of the global energy transition. Analysts believe that Reliance’s New Energy business will significantly contribute to its growth trajectory.

A Strategic Move for Investor Value

Reliance’s bold 1:1 bonus share issuance on Dhanteras is a significant step in creating value for shareholders while showcasing the company’s confidence in its diversified business model. As Reliance continues to expand in retail and clean energy, it remains a compelling investment choice with robust growth potential for the coming years.