Riding high on the positive response to Jio Prime membership as well as an extension in the deadline to subscribe to it, shares of Reliance Industries soared 4.6 percent intraday on Monday. The stock was trading at a nine-year high.
The index heavyweight contributed to almost all of the gains on the Nifty.
Investors placed bullish bet on the stock after the company announced an extension of its Jio Prime membership deadline till April 15.
The company said that the service was extended due to the overwhelming response from the customers.
Over 72 million Jio customers have signed up for Jio Prime membership, the company said in a statement.
“Customers who could not enroll for Jio Prime by March 31 can still do so by paying Rs 99 along with their first purchase of Jio’s Rs 303 and other plans till 15th April,” Reliance Industries Chairman Mukesh Ambani had said in a statement.
JPMorgan is currently neutral on the stock with a target of Rs 1,240. The research firm sees Reliance’s decision to extend Jio Prime deadline as a step to add more subscribers and believes that the firm’s telecom journey has just begun. The sign-ups are a positive, but extension and more freebies are puzzling, it says.
Furthermore, it sees net debt to continue to rise and the final capex figure is yet to be seen. Jio would need revenues of USD 400-500 billion to be PBT positive and forecasts EBITDA of USD 221 billion in FY21 and USD 287 billion in FY22. The stock also implies a telecom EBITDA of over USD 4.7 billion.
The stock rose nearly 11 percent in the past one month, while its three-day movement was seen at 9.1 percent. At 09:40 hrs, the stock was quoting at Rs 1,370.00, up Rs 50.80, or 3.85 percent on the BSE. It touched a 52-week high of Rs 1,380.00.
Disclaimer: Reliance Jio is a part of Reliance Industries that owns Network 18 Media & moneycontrol.com