Sensex rallies 743 pts on Reliance-Facebook deal; Nifty tops 9,150
Mumbai, April 22
Equity benchmark Sensex rallied 743 points on Wednesday, buoyed by robust gains in index heavyweight Reliance Industries as it struck a Rs 43,574-crore deal with Facebook, amid positive cues from the global markets.
The 30-share index ended 742.84 points or 2.42 per cent higher at 31,379.55. The wider NSE Nifty surged 205.85 points, or 2.29 per cent, to finish at 9,187.30.
Reliance Industries added more than 350 points to the Sensex by soaring over 10 per cent, after Facebook announced an investment of USD 5.7 billion (Rs 43,574 crore) to buy a 10 per cent stake in Jio Platforms.
This deal makes Facebook the largest minority shareholder in Jio Platforms, which is part of Reliance Industries.
Asian Paints, IndusInd Bank, Nestle India, Maruti, Hero MotoCorp and HUL were also among the gainers, spurting up to 5 per cent.
On the other hand, ONGC, L&T and PowerGrid ended in the red.
Positive cues from global markets too lifted investor sentiment here, traders said.
Bourses in Shanghai, Hong Kong and Seoul ended with gains, while Tokyo closed lower.
Stock exchanges in Europe were trading significantly higher in early deals.
Brent crude futures slipped 2.16 per cent to USD 18.91 per barrel.
Meanwhile, the rupee recovered from record low levels to settle higher by 15 paise at 76.68 (provisional) against the US dollar.
RIL shares zoom over 10 pc
Shares of Reliance Industries on Wednesday jumped over 10 per cent.
The scrip of the country’s most valued firm by market cap advanced 10.30 per cent to close at Rs 1,363.35 on the BSE. During the day, it surged 12 per cent to Rs 1,384.70.
On the NSE, shares of the company zoomed 9.83 per cent to close at Rs 1,359.
It was the top gainer on both the 30-share BSE Sensex and NSE Nifty-50.
In traded volume terms, 26.30 lakh shares were traded on the BSE and 6.5 crore shares on the NSE during the day.
The company’s market valuation also jumped by Rs 80,710.7 crore to Rs 8,64,267.70 crore.
Earlier in the day, Facebook announced an investment of USD 5.7 billion (Rs 43,574 crore) to buy a 10 per cent stake in the firm that houses billionaire Mukesh Ambani’s telecom arm Jio as the social media giant looks to expand presence in its largest market in terms of subscriber base.
“Today we are announcing a USD 5.7 billion, or Rs 43,574 crore, investment in Jio Platforms Ltd, part of Reliance Industries Ltd, making Facebook its largest minority shareholder,” the company said in a statement.
Reliance in a separate statement said the investment by Facebook values Jio Platforms at Rs 4.62 lakh crore pre-money enterprise value (USD 65.95 billion, assuming a conversion rate of Rs 70 to a US dollar).
“Facebook’s investment will translate into a 9.99 per cent equity stake in Jio Platforms on a fully diluted basis,” it said.
Jio Platforms, a wholly-owned subsidiary of Reliance Industries Ltd (RIL), houses digital services of the group. Reliance Jio Infocomm, is a wholly-owned subsidiary of Jio Platforms.
The Facebook deal is part of value unlocking by RIL to cut debt. RIL has been seeking strategic partnerships across its businesses while targeting to deleverage its balance sheet.
RIL was also the biggest contributor in Wednesday’s market rally where the 30-share BSE index rose by 742.84 points or 2.42 per cent to close at 31,379.55.
“RIL had restructured its digital business into one consolidated wholly-owned subsidiary – Jio Platforms – which would host all the digital initiatives of the firm, including Jio digital services (mobile, broadband), apps, tech capabilities (AI, Big Data, IoT) and investments (like Den, Hathway),” Credit Suisse said in a note.
It said that Facebook’s investment into this entity will further Reliance Industries’ digital initiatives and will help in deleveraging.
“The deal will aid in achieving net debt-free (target) by March 2021. As of December 31, 2019, net debt for the group stands at Rs 1,531 billion (Rs 1.53 lakh crore) and with Facebook’s investment, this should put RIL on course to be net debt free by Mar-2021,” it said. PTI
