Brokerages bullish on RIL post Aramco deal buzz, Jio’s commercial launch

The announcements saw the stock rally over 8 per cent in intra-day trade on the National Stock Exchange (NSE) to Rs 1,257 levels on Tuesday

From a possible deal with Saudi Aramco for a 20 per cent stake in the company’s oil-to-chemicals (O2C) business segment and the commercial launch of Jio GigaFiber on September 5, the slew of announcements made by Reliance Industries’ chairman Mukesh Ambani in its 42nd annual general meeting (AGM) on Monday have been taken positively by brokerages, who now maintain a ‘buy’ rating on the stock from a 12-month perspective.

The announcements saw the stock rally over 8 per cent in intra-day trade on the National Stock Exchange (NSE) to Rs 1,257 levels on Tuesday.

Here’s how leading brokerages have interpreted the statements:

JEFFERIES

We like this clear intent to lighten the balance-sheet even if the central plank for now is Aramco picking up a non-voting instrument that will give it a 20 per cent economic interest in its refining & petrochem (O2C) business. In return, Aramco will also get a board seat at Reliance and has also assured 0.5mbpd of oil supplies at market prices. For Reliance, though, this complex structure prevents a ring-fencing of O2C cashflow until it is transferred to an SPV in about five year…