Tale of the Tape 

Howdy folks. Welcome back to the market of stocks!

Nifty (+0.8%) and Sensex (+0.7%) snapped a three-day slump as investors cheered India’s better-than-expected Q1 GDP data. The cheer spread to broader markets as well, with Midcaps (+2%) and Smallcaps (+1.6%) seeing strong buying. A cool 422 stocks in the NSE 500 ended higher.

Except Pharma (-0.1%), every other sector ended in the green or flat. Auto stocks (+2.8%) led the rally, followed by Metals (+1.6%) and IT (+1.6%).

In today’s issue of the Daily Rip, we do a deep dive on why investors were disappointed with Reliance’s AGM, analyse Amanta Healthcare’s IPO, look at today’s top newsmakers and more.

Honourable Mentions: 

Ashok Leyland (+1%) was up after announcing a Rs 5,000-cr investment in battery manufacturing over the next 7-10 years. Most auto companies started reporting their August sales today; check out the full list here.

Check out the NSE 500 heatmap:

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Is that it?

Reliance Industries put on a meh AGM. Not because there were no announcements. But it’s cuz Mukesh bhai’s message for investors hasn’t changed for three years now: ‘wait and watch’. This can be frustrating, but let’s unpack this year’s big takeaways: 

1) The Jio question: A 2026 IPO was initially seen as a BIG trigger, but its structuring may be a problem. Reports say Reliance will look to sell only 5% of Jio and still keep it as a subsidiary under the RIL fold. This would apply a ‘holding company discount’ to RIL -- typically around ~20% -- and hurt valuations moving forward. Experts say the better option for value-unlocking was a clean demerger that gives Jio shares directly to RIL investors. At this point, experts say any RIL gains due to Jio’s listing will likely be offset by a holding company discount. 

2) Retail ambitions: The vertical is targeting +20% CAGR topline growth over the next three years and boosting its online mix to >20% revenue (vs high single digits currently). ICYMI - the company will spin off its consumer brands biz (Campa Cola etc) into a new vertical directly under RIL. This is more prep for a Retail IPO, which we got no new deets on. 

3) New energy: Anant Ambani spoke at an AGM for the first time! Unfortunately, he didn’t have much to say. The battery gigafactory will start by 2026; the electrolyster for green hydrogen will also start production next year. Its big solar module push has started. It will take time for this to start delivering.

Big Picture: Ambani wants to double Reliance’s EBITDA by 2027-end (vs 2022 levels). The pieces are all there, but we’re still waiting for him to execute. The gap between Jio and Airtel is substantial. Retail is an insane growth driver, but we don’t know if it can succeed in quick commerce. And is green hydrogen a hoax or something real? Finally, its oil biz remains a key cash cow even if it has a Russian PR problem right now.  The stock dipped -2% after the AGM and is in the red today too. But FWIW - many analysts see a 15%-28% upside from current levels.