RIL joins TCS in $100-billion market cap club

Reliance Industries on Thursday joined Tata Consultancy Services (TCS) in the $100-billion market capitalisation club. TCS, currently valued at $110 billion, entered the club in April, while this is the Mukesh Ambani-led firm’s re-entry after more than a decade. HDFC Bank, India’s third most-valuable firm, could join the two biggies, if its stock appreciates 18%.

Reliance Industries (RIL) on Thursday joined Tata Consultancy Services (TCS) in the $100-billion market capitalisation club. TCS, currently valued at $110 billion, entered the club in April, while this is Mukesh Ambani-led company’s re-entry after more than a decade. HDFC Bank, India’s third most-valuable company, can join the two biggies if its stock appreciates another 18 per cent from current levels. Meanwhile, RIL has also become the world’s eight-biggest oil and gas company. US-based Exxon Mobil (m-cap $350 billion) and Europe’s Royal Dutch Shell ($295 billion) are the world’s largest in terms of market cap. To be sure, most companies in the list are focused on upstream operations, while RIL is primarily into downstream operations. Shares of RIL, up 18 per cent this year, have more steam left in them if valuations of global oil and gas companies. The top 10 oil and gas companies trade at price-to-earnings (P/E) multiple of around 25 times. RIL, on the other hand, currently trades at 19 times its trailing 12-month earnings. Also, the RIL during its previous peak in January 2008 traded at a P/E of 35 times.