Reliance Industries Ltd's shares have long traded below their sum-of-the-parts valuation, with investors yet to fully recognise the value of its businesses, according to Gurmeet Chadha, managing partner and chief investment officer of Complete Circle.
Speaking to CNBC-AWAAZ on the strong rally in the Reliance Industries stock, which surged 11.6 percent to close at the day’s high of Rs 1,300 on Monday, he identified the company’s strong performance in the oil-to-chemicals (O2C) segment, steady Jio numbers and the listing of Jio Platforms as key factors supporting investor sentiment. He also said better-than-expected retail performance could be another major trigger for the stock.
“We rarely see daily price action in a big stock like Reliance. But it was undervalued for a long time,” he said.
Chadha explained that around the time the Jio Platforms IPO came into focus, Reliance Industries’ SOTP valuation was estimated at approximately $300 billion. Even after applying a 20-30 per cent holding-company discount, Chadha said the stock was undervalued by around 20-25 percent on an adjusted valuation basis of $200 billion.
According to him, Reliance Industries’ results for the second quarter of FY27, released on Friday, acted as a catalyst for the recent rally.