Mukesh Ambani gets $6.2 bn richer in a week as Reliance shares jump 10%

New Delhi: Mukesh Ambani, Asia's richest man, has seen his wealth surge by $6.2 billion in just a week as shares of his flagship company Reliance Industries rallied just over 10%. According to Bloomberg Billionaire Index, Ambani's net worth stood at $83.2 billion (or Rs 6.07 lakh crore) on Tuesday (June 1, 2021) as compared to $77 billion (or Rs 5.62 lakh crore) on May 23.

As per the latest data available on exchanges, Mukesh Ambani holds 49.14% stake in Reliance Industries. RIL shares climbed half a percentage point Tuesday to close at Rs 2,169 apiece. The rally in RIL shares has helped the benchmark Nifty scale record high this week as the Mukesh Ambani-owned company has nearly 12% weightage in the benchmark index. 

Buying in RIL shares was led by decadal high spreads in polymers. Analysts say if the current polymer spreads sustain in FY22, RIL’s operating profit estimates could surge 14%. A recent note by Jefferies said that the spreads are unusually high on strong downstream demand. If the trend persists, RIL will see a 50% upside to its segment EBITDA.

“Sustained strong petrochemical performance improves the likelihood of Reliance O2C (oil to chemicals) stake sale in FY22, and this could lead to a reversal of the 40% Nifty underperformance,” the Economic Times quoted a note by Jefferies as saying. It expects the stock to reach a price of Rs 2,580.

Worth mentioning here is that RIL stock nearly trebled between March and September last year — from a closing low of Rs 875 on March 23 to Rs 2,324 on September 16 — after a series of fundraising in its telecom and retail businesses and a record rights issue. Since then, the stock has been range-bound and has underperformed benchmark indices.

Technical analysts say the current momentum oscillator indicates the rally in RIL shares would continue.

“The sideways range breakout and sustained gains above the 200-DMA (Rs 2,045) indicate resumption of the much-awaited uptrend,” the business daily quoted Sandeep Porwal, technical analyst, Ashika Stock Broking.

According to Gaurav Bissa, an analyst at LKP Securities, the RIL stock has jumped from an immediate support area and is now on the cusp of a breakout from the triangle pattern. “The relative strength chart of RIL… implies the RIL/Nifty ratio is expected to go up strongly, and… this outperformance is expected to continue for weeks to come,” Bissa said.

According to analysts, the technical charts are signalling another 15% short-term rally in the stock, which may add another $10 billion to Ambani's wealth, making him the 8th richest person in the worth as against 12th richest now according to Bloomberg Billionaire Index.