India's largest stock, Reliance Industries has witnessed a sharp correction over the past weeks. The oil and gas behemoth gives zero returns on a weekly, monthly, and six-monthly basis, while its YTD performance is squeezed to a single-digit upside. This week, Reliance stock continued to trade volatile. The stock is currently on a losing streak for 2-sessions in a row. The upcoming driving factor would be its Q2 results and bonus issue. Should you buy Reliance on dips?
Reliance Industries Share Price:
The billionaire Mukesh Ambani-backed stock dipped by 0.3% to end at Rs 2742.05 apiece on BSE, after market hours on October 10. The m-cap is around Rs 18,55,265.04 crore.
So far this week, Reliance saw only gains on October 8, where the stock surged by 2%. While Reliance is down by 1.64% on October 9, and lower by 1.8% on October 7, apart from the latest dip.
The stock is down by 15% from its 52-week high of Rs 3,217.90 apiece, while it is over Rs 500 away from hitting its 52-week low of Rs 2,221.05 apiece.
The large-cap's weekly performance is down by 1.9%, while it plummeted by 5.6% on month-on-month, and the stock dived nearly 6.6% on a half-yearly basis.
Reliance Industries Bonus Issue:
Reliance's board of directors are scheduled to meet on Monday, October 14, 2024, inter alia, to consider and approve the standalone and consolidated unaudited financial results of the Company for the quarter and half-year ended September 30, 2024.
The behemoth has announced a bonus issue of a 1:1 ratio, where it will award 1 free share on the existing 1 equity share fully paid up. The record date is yet to be announced for the same. It will be keenly watched if Reliance announces the record date for bonus issue on full paid-up equity shares on October 14.
However, Reliance had set October 7, as the last date for those investors who are holding partly paid-up shares. After approving for bonus issue in the latest AGM, Reliance on September 5th, announced the approval for the forfeiture of partly paid-up equity shares on which call money (First Call or Second & Final Call or both) remains unpaid.
Moreover, Reliance also said that the forfeiture of the said partly paid-up equity shares will be effected in case the payment of call money along with interest. Thereby, failure to pay for the partly paid-up equity shares up to October 7, 2024, will lead to confiscation of the shares by the company. If the shares are confiscated, then these investors will not be eligible to enjoy the rewards of --- - Bonus shares in the ratio of 1:1; - Equity shares of Jio Financial Services Limited which are currently lying with JFSL Trust - PPS (RIL).
Reliance has already announced that they plan to reward bonus issues ahead of Diwali.
How To Be Eligible For Bonus Shares? As per Motilal Oswal, the eligibility for bonus shares depends on the record date and ex-date of the shareholders.
Record Date: Motilal's note pointed out that the record date is a cut-off date set by the company, and the investors must be shareholders of the company before this date for them to be eligible to receive stock bonus share issues. Notably, ex-bonus date and record date are now on the same day, with exceptions of weekend.
Motilal's website in generic terms explained that in India, the delivery of shares into a Demat account takes place two days after the trading date. All existing shareholders before the ex-date and record date are eligible to receive bonus shares issued by a company. However, to qualify for bonus shares, the company stocks must be bought before the ex-date.
BUY Reliance Industries Share?
At the latest, Emkay Global has recommended ADD on Reliance stock for a target price of Rs 3,200.
In Q2FY24, Emkay expects Reliance's O2C EBITDA to be down 3% QoQ to Rs127.6bn; Upstream EBITDA down 1% QoQ to Rs51.4bn; Retail EBITDA to increase 1% QoQ to Rs57.4bn; Jio ARPU to rise 4% QoQ with Jio EBITDA to grow 6% QoQ to Rs159bn. Subscribers are expected to decline by 0.07mn in Q2FY25.
On the other hand, JM Financial has recommended BUY on Reliance for a target price of Rs 3,470.
Also, global brokerage Morgan Stanley has set a target price of Rs 3,325 apiece, with an Overweight rating on Reliance. The target price is trimmed from an earlier target of Rs 3,416 apiece.
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