Reliance Industries hits over 7-year high as Jio promises to end freebies

 

LATEST NEWS – Reliance Industries (RIL) hit an over seven-year high of Rs 1,172, up 8% on the National Stock Exchange (NSE), recording its sharpest rally in intra-day trade in past 21 months.

The stock hit its highest level since June 2009. Earlier, on May 16, 2014, it rallied 8.7% during intra-day trade. On the BSE, the stock hit high of Rs 1,187 on November 1, 2010, during intra-day trade.

In past two trading sessions, the stock surged 9% from Rs 1,075 on February 20, 2017 after Reliance Jio Infocomm (“Jio”), a subsidiary of RIL, announced that its tariff plans will become applicable from April 1, 2017.

The new offerings will no longer be free but Jio has priced its services attractively to retain its 100 million customers, who have signed up since September 5, when the services were first offered. Jio is seeking to retain them through special prime memberships at a one-time fee of Rs 99 and Rs 303 a month for unlimited voice, data and content.

“Consolidation within incumbents effectively improves their financial position and allows them to match JIO on pricing for longer, and this would be negative for JIO as it would bring down the industry ARPUs (average revenue per users) and lower margins. However, if JIO sticks to its stated or ARPUs where the actual base pack starts at Rs 499, it would be positive for JIO in the long term,” analysts at JP Morgan said in report dated January 31, 2017. READ MORE

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