Reliance share price jumps over 2% on THIS acquisition buzz. More upside possible?

Reliance share price: Shares of oil-to-telecom-to-retail conglomerate Reliance Industries jumped over 2 per cent in intraday trade on BSE on Friday, November 29, a day after the company announced its wholly-owned subsidiary acquired a 21 per cent stake in the US-based Wavetech Helium, Inc. for $12 million. According to the company, the acquisition is part of its strategy to expand its exploration and production business in low-carbon solutions.

The stock opened at ₹1,280 against its previous close of ₹1,271.35 and rose 2.2 per cent to the level of ₹1,299.30 on the BSE. Around 1:40 pm, the stock traded 1.97 per cent higher at ₹1,296.45.

“Reliance Finance and Investments USA LLC, a step-down wholly owned subsidiary of the company, has on November 27, 2024, entered into a stock purchase agreement with Wavetech Helium, Inc. and subscribed to a 21 per cent stake of Wavetech Helium for an aggregate consideration of $12 million,” the company said in an exchange filing on November 28.

“Wavetech Helium was incorporated on July 2, 2021, in the United States and started its commercial operations in 2024. It is a US helium gas exploration and production company engaged in the acquisition, exploration, and development of properties to produce helium gas from underground reservoirs,” said the company.

Reliance share price trend

Shares of India’s largest company by market capitalisation have experienced modest gains over the past year. While the Sensex has risen about 20 per cent, Reliance shares have gained just over 6 per cent as of the close on November 28.

On a monthly basis, the stock has been in the red since September. It declined by 2 per cent in September and 10 per cent in October. For November so far, the stock has been down about 3 per cent.

It hit a 52-week high of ₹1,608.95 on July 8 this year and a 52-week low of ₹1,185.63 on November 30 last year.

More upside possible?

The stock has seen healthy gains of about 2 per cent this week amid fresh escalation in tensions between Russia and Ukraine which is expected to benefit oil-producing companies, including Reliance.

Experts believe soaring crude oil prices due to the geopolitical tension are expected to allow margin benefit to Reliance Industries.

Recently, foreign brokerage CLSA maintained its ‘outperform’ rating on Reliance stock, with a target price of ₹1,650, as it said the company’s new energy business, worth $40 billion, is being ignored by the market.

Reliance aims to set up a fully integrated 20GW solar gigafactory by 2026/2027 and launch cell-to-module production in the next three to four months.

According to CLSA’s estimates, the solar business could have earnings before interest, tax, depreciation, and amortisation (EBITDA) of $1.7 billion over the next four to five years and a value of over $30 billion, which is at a discount to the replacement cost valuation of recently listed Indian solar PV manufacturers.

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