RIL first Indian firm to hit Rs 8 trillion market cap, TCS not far behind

Reliance Industries (RIL) on Thursday became the first Indian company to cross Rs 8 trillion in market capitalisation. The stock gained 1.9 per cent to close at Rs 1,270, valuing the Mukesh Ambani-led firm at Rs 8.05 trillion ($115 billion at current exchange rate of Rs 70.11 for a dollar).

Shares of RIL have rallied 34 per cent from their recent low of Rs 945 on June 28 amid big-bang announcements during its annual general meeting (AGM) in early July. During the same period, the benchmark BSE Sensex gained 9.5 per cent.

Tata group flagship Tata Consultancy Services (TCS) also is nearing the same milestone. Currently, the technology giant is valued at Rs 7.8 trillion ($111 billion), 2.6 per cent away from the Rs 8-trillion mark.

The oil-to-telecom conglomerate added the latest Rs 1 trillion in market cap in just 23 trading sessions. RIL had first crossed Rs 7-trillion market cap on July 20. It took 181 trading days to move from Rs 6 trillion to Rs 7 trillion market cap. Currently, RIL’s market value accounts for 5 per cent of India’s total market cap. So far this year, shares of RIL have gained 38 per cent, compared to 12 per cent gain in the Sensex. The company has seen its market cap increasing by Rs 2.21 trillion this year.

TCS, on the other hand, has seen its shares soar 51 per cent this year and market value go up by Rs 2.63 trillion.

Both RIL and TCS now account for nearly a tenth of the country’s market value.

In the past two months, RIL has also seen huge buying from global exchange-traded funds (ETFs). RIL now has tenth-most weightage in the MSCI Emerging Markets Index, which is widely followed by global funds.

RIL shares saw huge spurt following its AGM on July 5, where it announced big plans for its telecom and retail verticals.

Analysts at JP Morgan say the progress in the retail and telecom business would determine how much the stock could be rerated from current levels. There is high expectation from investors that RIL could monetise the massive investments made across the consumer businesses (mostly Jio). The recent sharp improvement in Reliance Retail profitability has increased expectations about possible Reliance Retail monetisation, the brokerage firm said in recent report. Analysts at Equirus Securities remain positive on the stock on the back of a strong growth in the company’s retail, petrochemicals (petchem) and digital businesses.