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Whenever there is talk of the country’s richest industrialist Mukesh Ambani and his companies related to Reliance Industries (RIL) in the Indian stock market, the eyes of the investors automatically focus on the screen. At present, the shares of two big companies belonging to Mukesh Ambani’s group and portfolio are making a huge splash on Dalal Street. Despite the sluggishness of the stock market, both these stocks are witnessing vigorous buying by institutional and retail investors.
As soon as the market opened, due to aggressive buying by investors, the shares of a company suddenly hit the upper circuit, due to which sell orders disappeared. On the other hand, shares of another related company linked to Reliance Group were also seen rising near new 52-week record levels. An intense discussion has erupted among market experts regarding the real reasons behind this sudden huge surge and the future targets.
The companies whose stock has surprised and pleased the investors the most in the stock market are the major telecom and digital services companies like HFCL Ltd and Just Dial, under the control and majority stake of Mukesh Ambani. Especially the shares of HFCL Limited, a company manufacturing network gears and fiber optics, hit an upper circuit of 5% in the morning trading session itself. During trading, the share price suddenly rose and touched its highest band.
The simple meaning of upper circuit is that there is a long queue of buyers to buy this share, but no investor is ready to sell his holding at the current price. On the other hand, Just Dial shares have also registered a strong intraday rise of 8% to 10%. During the trading, a sudden jump of many times was seen in the trading volume of these two companies, which is an indication that big fund houses and big bulls are kind to them.
According to market analysts and research reports, there are many big and strategic reasons behind this sudden surge in the shares of these companies. The biggest reason is the news of Reliance Jio Platforms’ network expansion and big orders related to the upcoming 5G and 6G infrastructure projects. These subsidiaries of Reliance Group have received large scale supply orders for optical fiber and digital solutions from domestic and international markets.
Apart from this, in the recently released financial data of the current quarter (Quarterly Results), the profit and operating margin of the companies have been very excellent. The continuously strengthening balance sheet and reduction in debt have further strengthened the confidence of investors, due to which there was a buying spree in shares as soon as the market opened.
Due to this strong rise, the wealth of investors who had included these shares in their portfolio at lower levels has increased by crores of rupees in a single day. If we look at the performance of the last few months, these stocks have given multibagger returns to their investors. Experienced brokerage houses in the market believe that the outlook of these companies looks quite positive due to their direct connection with Mukesh Ambani’s digital and data revolution vision.
After getting the breakout on the technical chart, analysts say that the shares are holding their new support level. However, retail investors are being advised not to get emotional just by seeing the rise in any upper circuit stock, but to make further strategy only after understanding the true value and fundamentals.
The huge investment being made in the digital services, retail and new energy sectors under the leadership of Reliance Industries and Mukesh Ambani is having a direct impact on the market valuation of small and medium companies associated with it. Due to the nationwide expansion of 5G infrastructure and increasing use of AI based digital tools, the business revenue of these stocks is expected to increase further in the coming days.
This is the reason why both domestic retail investors and foreign institutional investors (FIIs) are showing great interest in increasing their stake in these shares. It will be very interesting to see in the coming trading sessions whether these stocks are able to maintain their upper circuit stormy momentum or profit booking is seen at the upper levels.