Jio tariff plans lift RIL shares by 11%

Jio tariff plans lift RIL shares by 11%

 Shares of Reliance Industries hit multi-year highs after chairman Mukesh Ambani announced on Tuesday that Reliance Jio, a unit of the company, will start charging its subscribers for data from April 1.

On the NSE, RIL zoomed 11.17% (Rs 121.60) to close at Rs 1209.80 with volumes of 2.91 crore shares. As far as the BSE is concerned, RIL’s shares ended up 10.97% (Rs 119.40) at Rs 1,207.65 with volumes of 33.31 lakh shares.

The company’s shares had last touched these levels in June 2009. Brokerages believed that the announcement by Reliance Jio to charge for its services is likely to be positive for RIL. “No further extension of the free offer is a relief for the stock, which has been impacted by the increase in Jio capex and lack of visibility (until now) on commercialisation of services,” Citi said in a note.

Goldman Sachs believes that the announcement removes a big overhang over the stock.

“RIL chairman Mukesh Ambani announced that Jio would begin charging subscribers from April 2017. There were some expectations RIL would extend the free offer by a quarter; it is a positive that Jio is on track for monetisation sooner than expected,” Credit Suisse said.
  “Over the last few weeks, a key investor concern was the possibility of Jio extending its free offer period or starting with nominal tariffs at the onset. Jio’s announcement removes this key overhang,” Goldman Sachs said.

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