RIL share price gains nearly 1% even as Sensex falls, after Jio prepays Rs 30,791 cr spectrum dues

Reliance Industries Ltd (RIL) share price gained nearly 1 per cent to Rs 2,541.65 on BSE on Wednesday amid a weak market, after Reliance Jio said it has paid its entire deferred liabilities towards spectrum acquisition prior to March 2021. The company prepaid Rs 30,791 crore, including accrued interest, to the Department of Telecom (DoT). BSE Sensex and NSE Nifty 50 fell about 0.9% to 60,218 points and 17,972 points, respectively. Analysts say that the prepayment is definitely a positive thing for the whole RIL group. “The group is making continuous efforts to make it a debt free company, and these steps are going to benefit in achieving their vision,” Pavitraa Shetty, Co-founder & Trainer, Tips2Trades, told Financial Express Online.

Stock talk: RIL share price levels to watch

– “The stock is witnessing some selling pressure due to negative market sentiments right now but RIL shares may touch the level of Rs 2,650-2,700 in near-term,” Ravi Singh, VP & Head of Research, Share India Securities, told Financial Express Online.
– “Technically, [Rs 2,508-level] remains strong. A daily close above Rs 2,564 could lead to an extended rally till Rs 2,660-2,713,” Pavitraa Shetty of Tips2Trades said.

Analysts say that despite a prompt prepayment of spectrum dues, improvement in customer acquisition for Reliance Jio, and Mukesh Ambani’s company being on an acquisition spree in the retail space, global market volatility due to the current Omicron wave, and being prepared for a rising interest rate cycle, the positive news are not being factored in Reliance stock price currently.

RIL share price performance

In the last one month RIL share price has gained nearly 11 per cent and over 20 per cent in the last six months. So far in January 2022, it has gained 5 per cent, while 25.02 per cent in the last one year. In traded volume terms, 70,000 shares were traded so far on BSE, while 20.49 lakh scrips exchanged hands on NSE.

RIL’s spectrum liabilities

The liabilities pertained to spectrum acquired by the company in 2014, 2015, 2016 auctions, and the spectrum acquired in 2021 through trading of right to use with Bharti Airtel. The telco had acquired 585.3 MHz spectrum in these auctions, trading. These liabilities were due in annual installments from FY 2022-23 to 2034-2035 and carried an interest rate between 9.30% to 10% per annum with an average residual period of over 7 years. Jio estimates that the prepayments will result in interest cost savings of around Rs 1,200 crores annually, at the current interest rates.

On Tuesday, Mukesh Ambani-led Reliance Industries’ retail arm Reliance Retail acquired a 54 per cent stake in domestic robotics company Addverb for USD 132 million (about Rs 983 crore). Addverb has developed highly automated warehouses for RIL, Flipkart, HUL, Asian Paints, Coca-Cola, Pepsi, ITC, and Marico. With this investment, RIL will hold around 54 per cent stake in Addverb, becoming a strategic partner. Addverb will continue to operate independently and will use the funds received from Reliance to expand business overseas as well as set up one of the biggest robotic manufacturing facilities in Noida.

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