Frenzy at Reliance counter

There is no doubt about Mr. Mukesh Ambani vision/ability/capability to read things before hand, quite early than anyone could even sense it. He was the one who diversified into digital space by launching Jio knowing fully that oil and gas dependence is not going to sustain Reliance any longer . It pays off like anything. Jio revolutionized the telecom space in India and fueled the ambition of common and affluent Indians alike to be active participant in digital India and take the path on data highway.
But it was a master stroke during Corona time,when the world was reeling under corona outbreak, he knew that the bread and butter business of Reliance in oil and gas sector will be under tremendous strain and if he waits further then valuations will go down and difficult to recoup in next 2 -3 years. He beautifully used corona opportunity to his full potential proving that there is opportunity even during such pandemic. He started offloading Jio platform stake to various players some giants in digital space and some looking for investment space for longer term. He created a very planned frenzy in reliance Jio counter to attract biggies and offloaded 33 % of its stake. 
The market rewarded this move and took Reliance share to unprecedented heights in a short span of time from its low of March 2020 to high in July 2020, more than 100 % run.US-China trade frictions ,banning call of  Huawei for 5 G, China-India border skirmishes and boycott call for Chinese products all helped positively in keeping this frenzy alive to an alarming level and that pays huge dividends to Reliance.

On the back of it he also issued one of the biggest rights entitlement  and all got fully subscribed. His next action would be in retail and one can think of similar run like Jio in retails as well. This means in near future reliance is going to be trifurcated into Reliance ( Oil & gas) , Reliance Jio and Reliance Retail.

The only worry is that current price of Reliance and the market overall  is reflecting its future potential that is 2-3 years. The market has completely overlooked its 2/3 rd business which is under strain and there is no clarity on Saudi Aramco deal.

One needs to be cautious in short run and keep oneself safe  from such frenzy.


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