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RIL shares jump 8% to hit all-time high on positive sentiment over Reliance Retail-Silver Lake deal

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The stock rose as much as 2.3 percent to its record high of Rs 2,211 per share on BSE.

The share price of Reliance Industries surged over 8 percent to hit its all-time high, a day after the company announced that private equity firm Silver Lake will invest Rs 7,500 crore for a 1.75 percent equity stake in its subsidiary Reliance Retail Ventures.
The stock rose as much as 8.4 percent to its record high of Rs 2,343.90 per share on BSE. It also became the first Indian company to hit $200 billion market cap.
The company's market capitalization rose to a record Rs 14,14,764.90 crore or $192.85 billion and the partly paid-up shares of the company also rose nearly 8 percent taking the m-cap to Rs 57,815.36 crore or $7.82 billion. In total, the market values the company at $200.68 billion. This is about twice the size of the next biggest Indian firm, TCS.
After a slew of investments in Jio Platforms, the company is back in the news with more investments in its retail arm. The latest investment comes 10 days after RIL announced the acquisition of the Kishore Biyani-promoted Future Group's retail, wholesale, logistics, and warehousing businesses through Reliance Retail.
This is the second large investment by Silver Lake in a Reliance Industries subsidiary after investing $1.35 billion or Rs. 10,200 crore in Jio Platforms for a 2.08 percent stake in two tranches earlier this year.
With this deal, Jio Platforms and Reliance Retail now account for over Rs 9 lakh crore of RIL's valuation and the investment values Reliance Retail at a pre-money equity value of Rs 4.21 lakh crore.
Post the deal, brokerages are also bullish on the stock. Morgan Stanley said that it expects Reliance Industries to emerge stronger post the COVID-19 pandemic. Margin should surprise as pricing power rises for the company, it added. It is 'overweight' on the stock with a target at Rs 2,247.
Meanwhile, Citi believes strategic investment in retail could lead to a valuation premium for RIL being ascribed. HSBC, on the other hand, added that this could start another round of potential investments.
Reliance Retail Venture's subsidiary Reliance Retail operates India's largest retail business serving close to 640 million footfalls across its 12,000-odd stores nationwide.
Silver Lake Partners is a specialist firm focused on technology companies and has invested in global tech majors like Twitter, Airbnb, Alibaba, Dell Technologies, ANT Financials,  Alphabet’s Waymo, and Verily amongst others.
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