In end-March, when stocks were at their bottom, RIL’s market capitalization fell to ₹5.2 trillion, about 16% below that of TCS. At last count, RIL’s market capitalization stood at ₹14.6 trillion, adjusted for the value of the treasury shares it holds and was about 60% higher than that of TCS. For a conglomerate such as RIL, analysts typically resort to a sum-of-the-parts valuation. As it turns out, RIL’s market value is now higher than the sum of the value assigned by large investors to its different parts. Which brings us back to the joker in the pack—the so-called ‘option value’ for emerging revenue streams.

Source: Mint September 21, 2020 02:37 UTC