It must be noted that FPI and domestic mutual funds are underweight on the RIL by 2% and 3.9%, respectively, compared to its weight in the Nifty.RIL has 6.32% and 6.5% weight in the MSCI India and Nifty, respectively. Continued buying support has helped RIL's market capitalisation cross Rs 4 lakh crore to become the second-most valued company after TCS.RIL could outperform Nifty with it turning free-cash flow positive and that could result in higher dividend pay-out. RIL's dividend payout has been nearly 15% of net profit, considerably lower than dividend payout of global peers' such as Shell, BP, Total and Eni of nearly 47%.Foreign brokerage Morgan Stanley said in a note that the possibility of the higher payout cannot be ruled out as a trigger based on 2016 AGM commentary of the chairman indicated capital efficiency. The company's free-cash flow improved between FY09 and FY12, but dividend payout remained unchanged. Even including the fund deployed in the buyback, the payout touched 30%.The company is expected to turn free-cash flow positive in the first quarter of FY19 thanks to stable regional refining margins, end of its 5-year heavy capital expenditure cycle and commissioning of its two major downstream projects.

Source: Economic Times February 28, 2017 03:22 UTC