Reliance shares surge on debt plan
Reliance Industries shares saw their biggest intraday rise in a more than a decade yesterday after it set a target to reach zero net debt within 18 months and vowed to reward shareholders with higher dividends and periodic bonus issues.
The group’s billionaire chairman, Mukesh Ambani, unveiled plans to launch cut-price home Internet services across India next month, threatening to disrupt the telco market with offers of free voice calls for life, television and movie streaming, and even TV sets to go with some subscription plans.
The announcements drove Reliance shares up 12 per cent — its biggest such move since Jan 14, 2009.
The spike has put the company within touching distance of becoming the highest-valued Indian company again. Currently, it trails Tata Consultancy Services by slightly more than US$1 billion (RM4.17 billion).
But shares of telecom majors Bharti Airtel fell four per cent and Vodafone Idea slid five per cent as the announcements spurred worries of a repeat of what happened three years ago when Reliance’s Jio burst on to the scene.
Jio, with cheap data plans and freebies, has managed to become India’s top mobile operator by subscribers and the second-biggest globally over the three years.
Ambani said at Reliance’s annual general meeting on Monday customers of Reliance’s Premium Jiofiber broadband services “will be able to watch movies in their living rooms the same day these movies are released in theatres”.
Reliance shares were also buoyed by the news that Saudi Aramco plans to invest US$15 billion for a 20 per cent stake in its oilto-chemicals business.