India now has two companies that are valued over $100 billion.
Three months after Tata Consultancy Services Ltd. became India’s first information technology major to breach the $100-billion mark in market capitalisation, Mukesh Ambani-owned Reliance Industries Ltd.’s market value crossed the milestone for the first time in the last 10 years.
The country’s largest oil-to-retail conglomerate had last hit $100 billion in market capitalisation on 18 Jan, 2008.
RIL has been able to scale $100 billion in market value despite the rupee depreciating 7.5 percent against the US dollar.
This rally increased Ambani’s wealth to more than $42 billion, according to Bloomberg Billionaires Index. India’s richest man owns close to 47 percent in RIL— the owner of the world’s largest oil refining complex.
What Aided the Rally?
The company’s share price witnessed a strong bull run since Reliance Jio Infocomm Ltd.’s started commercial services on 5 September 2016. The company’s market capitalisation has doubled since then. The figure stood at $49.3 billion as on 2 September 2016.
RIL’s telecom arm, with investments of close to Rs 2.5 lakh crore, disrupted the telecom market with its free services and lower tariff plans. Reliance Jio was able to garner the most number of subscribers due to its free services and cheap tariff plans.
The company started charging for its services from April 2017 and turned profitable in the first 12 months of its operations. For the year ended March 2018, the company reported a net profit of Rs 723 crore mainly on the back of a regulatory push that reduced its expenditures.
India had cut the interconnect usage charges for domestic calls by 57 percent starting 1 October, which aided Jio’s financials in the quarter ended December.
(This story was first published on BloombergQuint.)
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