RIL spike on Jio tariff plan helps regain number 2 market cap rank as HDFC Bank slips on regulatory fears

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    At Wednesday’s close, the market capitalisation of Reliance Industries – India’s largest business conglomerate with diversified interests – was at Rs 3.92 lakh crore, surpassing the Rs 3.58 lakh crore of HDFC Bank – India’s largest private sector bank. (Image: Reuters)

    An unprecedented 11% surge in Reliance Industries shares on the prospects of fresh cash inflows from Jio, and simultaneously a drop in the shares of HDFC Bank on concerns of fresh regulatory scrutiny helped RIL topple HDFC Bank to regain the second spot in the list of India’s most valuable companies.

    At Wednesday’s close, the market capitalisation of Reliance Industries – India’s largest business conglomerate with diversified interests – was at Rs 3.92 lakh crore, surpassing the Rs 3.58 lakh crore of HDFC Bank – India’s largest private sector bank.

    Reliance Industries shares ended up 10.97% at Rs 1,207.65 on BSE near the day’s high of Rs 1,212. On the other hand, HDFC Bank shares ended down 0.93% at Rs 1,399.2, near the day’s low of Rs 1,395.6.

    Jio salute to Reliance Industries

    Reliance shares were cheering the prospect of fresh cash inflows from the commercialisation of its telecommunication services business Reliance Jio at a very healthy price point with the start of paid services beginning April.

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    Earlier yesterday, Reliance Industries Chairman Mukesh Ambani said that Reliance Jio, the newest entrant in India’s highly competitive telecom sector, will start charging fees from users for its voice and data services. Reliance Jio, which launched its services in September last year, has been offering free voice and data services under various sequential schemes. Its current scheme called ‘Happy New Year’ ends on March 31. Its tariffs at Rs 303 per month are higher than the industry-wide ARPU (average revenue per user) of sub-Rs 200.

    Further, Reliance Industries is also expected benefit a lot in the near future as the company’s projects under commissioning will significantly add to free cash flows, Jal Irani, Senior VP at Edelweiss Capital Services, said on Wednesday morning in an interview to CNBC TV18.

    Regulatory concerns on HDFC Bank

    On the other hand, HDFC Bank shares dragged on concerns over the fate of certain foreign institutions’ position in the company’s shareholding after the news reports suggested that the capital markets regulator SEBI (Securities and Exchange Board of India) and RBI are looking into the breach of investment limit by FPIs (foreign portfolio investors) and FIIs (foreign institutional investors) in HDFC Bank stock and will come out with steps to prevent such violation in the future.

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    Further, SEBI and RBI are looking at tightening trigger points for foreign portfolio investment limit breach for entire banking sector.

    Tata Consultancy Services – India’s largest information technology services provider – remains the country’s most valuable company with a market cap of Rs 4.75 lakh crore.

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