Reliance Industries Ltd. share price target

18 May 2020 Net D:E RIL has announced that General Atlantic would invest INR66b in Jio Platforms for 1.34% equity stake at post-money equity value of INR4.91t and at enterprise value of INR5.2t. Jio Platforms valuation in this deal is in line with the previous two deals Silver Lake and Vista Equity Partners (INR4.9t post-money equity) and is at 12.7% premium to the FB deal (INR4.4t). This is the fourth high profile investment in RIL in less than four weeks, during which the company has raised INR672b for 14.8% equity stake. The fourth high profile investment in Jio Platforms (in less than four weeks) reaffirms the global demand for the company and provides a huge thumbs up for its valuation. The company has a 40-year track record of investing in the technology, consumer, financial services and healthcare sectors. General Atlantic has investments in companies such as Airbnb, Alibaba, Ant Financial Box, Facebook, Uber and other global technology players.

In the phase 1 tranche of economic stimulus package of Rs 20 trillion, ~15 measures were announced with focus on MSMEs, NBFCs, Real estate and power sector amongst others. Phase 1 accounts for ~Rs 6 trillion of which ~10% is outflow from government in form of stimulus

Reliance Jio registered net addition of 17.5 million wireless subscribers during the Q4FY20.Reliance Retail now operate 11,784 stores with over 1,500 stores opened in the year, 30% space added. There was a strategic investment of 43,574 crore by Facebook into Jio Platforms Limited for a 9.99% stake. This results in Partnership...

Reliance Industries' (RIL) deleveraging initiatives have accelerated in the last three weeks, with ~Rs 610bn raised from a ~13.5% stake sale in RJio.

8 May 2020 Net D:E Reliance Industries (RIL) Jio Platforms appears to be the new darling of the global investing community. In less than three weeks, on 8 announced a third equity stake sale in Jio Platforms to US-based investment firm Vista Equity Partners. Vista would invest INR113.7b in Jio Platforms for 2.32% equity stake at post-money equity value of INR4.91t (in-line). Once again, this deal reiterates global investors interest in Jio Platforms. Moreover, Jio Platforms is in a sweet spot currently. Further, Jio Platforms has turned virtually debt free through the recent capital reorganization, InvIT structure and now the stake sales. We value Jio Platforms assigning EV/EBITDA multiple of 13x on FY22E to arrive at a target price of INR855/share. RILs announcement states that Vista Equity Partners would invest INR113.7b in Jio Platforms for 2.32% equity stake at post-money equity value of INR4.91t and at enterprise value of INR5.

ARPU and store count rise, offset by fall in GRM's In FY20, the company's revenue reached Rs. 611,645cr (+4.9% YoY), mainly driven by Organized Retail, Digital Services, and Media business. Organized Retail rose 24.8% YoY in FY20 and 4.2% YoY in 4QFY20, helped by addition of 1,500 stores and strong footfalls. Digital Services business reported a 40.7% YoY growth in FY20, majorly driven by 26.3% YoY growth in subscribers' base and 34.3% YoY growth in total wireless data traffic. However, this growth was partially offset by Refining & Marketing (R&M;) revenue of Rs. 387,522cr (-1.6% YoY) due to weak crude oil prices due to...

Reliance Industries (RIL) Q4FY20 adjusted result was largely in-line with consensus estimates led by consumer businesses and positive surprise from refinery profit. RIL reported inventory loss of Rs42.5 bn as an exceptional item due to a sharp fall of US$44/bbl in crude oil price during the quarter. Though, higher GRM of US$8.9/bbl vs consensus estimate of US$7.5/bbl and robust 49% YoY growth in Digital Services EBITDA was a positive surprise. The company expects Rs1.05 tr of cash inflow during CY20 led by Right Issue proceedings (1:15 ratio at a price of Rs1,257), Facebook deal (to be completed by Q1FY21) and BP deal, which would help achieving its target of zero-netdebt by year end. We cut our EPS estimates by 13% and 5% respectively for FY21E/FY22E...

4 May 2020 Net D:E Close on the heels of the RIL-Facebook deal (see Silver Lake has acquired 1.14% stake in Jio Platforms for INR55.8b, at post- money equity value of INR4.9t (in-line). The stake sale further reaffirms global demand/confidence of marquee tech investors in Jio Platforms. This would enable Jio Platforms to crystalize its digital plans by leveraging the global experience of its investors. Further, RJios leverage (net debt to EBITDA) has reduced from 9.7x in FY19 to 0.7x currently through recent capital reorganization, creation of InvIT and the stake sale, creating a lean balance sheet and healthy RoCE. We value Jio using DCF at INR 760/share which in-turn implies an FY22E EV/EBITDA of 11x. In an all-cash deal, Silver Lake has announced the acquisition of 1.14% stake in Jio Platforms at post-money equity value of INR4.9t and an enterprise value of INR5.2t. Compared to the recently announced Facebook deal at INR4.

GRM for Q4FY20 at $8.9 per barrel was much higher than street estimates of around $7.2-8.0 a barrel, and was also remarkably outperforming Singapore complex margins by $7.7 a barrel....

2 May 2020 Standalone debt net of cash and current investments has risen from INR938b in FY19 to INR1,516b driven by transfer of INR1,080b of debt from telecom and partial repayments. While the stake sale is expected to fetch INR436b, the company is creating a separate O2C business and is looking forward to another transaction of a similar magnitude. business EBITDA came in line with our estimate of INR218b (+5% YoY), primarily led by better performance of the Digital and Retail segments. However, higher depreciation and interest cost led to a miss on PBT (before exceptional expense) to INR135b (13% miss, -2% YoY). The company recognized exceptional expense of INR42.7b, primarily as non-cash inventory loss in the O2C business (with ~INR0.2b toward other liabilities and AGR dues reversal). Reported PAT came in at INR66b (-37% YoY). Adj. PAT was 8% lower YoY to INR96b (20% miss).