EUR 120.00 For Business Accounts Only

MOSL: Morning India (30/October/19): 1. Reliance Industries (Creating a digital behemoth); 2. Hindustan Zinc; 3. Petronet LNG; 4. Expert Speak (Auto); 5. Cement

MOrning India (30/October/19): 1. Reliance Industries (Creating a digital behemoth); 2. Hindustan Zinc; 3. Petronet LNG; 4. Expert Speak (Auto); 5. Cement

 

Today’s top research idea

Reliance Industries: Creating a digital behemoth; Announces two major changes in its digital business

• RIL will set up a wholly-owned subsidiary (WOS), which will be a holding company of RJIL (Reliance Jio Infocomm). The WOS will hold the complete digital bouquet of offerings viz., existing Jio apps (news and entertainment, social media, etc.), tech capabilities and investments in other technology companies, which were so far housed in RIL's standalone books.
• RIL will infuse INR1.08t of equity (OCPS - optionally convertible preference shares) in RJio through the WOS, in turn transferring liabilities of a similar amount to RIL. It will also transfer INR450b of equity and INR200b of OCPS from RJIL to the WOS
• We acknowledge that it may increase the valuation of the digital business from INR280/share to INR462/share and reduce valuation of the standalone business by INR182/share. We reiterate Buy with target price of INR1,630.

Piping hot news

RIL draws government ire by monopolising sale of its own CBM

The government is weighing options of terminating the production-sharing contract (PSC) or invoking arbitration to penalise Reliance Industries (RIL) for selling to itself all the coal bed methane (CBM) it produces, allegedly in violation of policy, sources said. The government has informed RIL of its objection to the gas sale, but the company asserted it had acted transparently and correctly, sources familiar with the development said.