Reliance share price jumps over 2% on acquisition of Wavetech Helium, Inc.

Shares of Reliance Industries, a conglomerate spanning oil, telecom, and retail, climbed over 2% during intraday trading on the BSE on Friday, November 29. The surge followed the announcement that its wholly-owned subsidiary acquired a 21% equity stake in U.S.-based Wavetech Helium, Inc. for $12 million. The company stated that this acquisition aligns with its goal of growing its exploration and production operations in low-carbon solutions.

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The stock opened at ₹1,280, up from its prior close of ₹1,271.35, and rose 2.2% to touch ₹1,299.30 on the BSE. As of 1:40 PM, it was trading 1.97% higher at ₹1,296.45.

Reliance Industries confirmed in an exchange filing on November 28 that "Reliance Finance and Investments USA LLC, a step-down wholly-owned subsidiary, entered into a stock purchase agreement on November 27, 2024, to acquire a 21% stake in Wavetech Helium for a total consideration of $12 million."

The filing also noted that Wavetech Helium was established on July 2, 2021, in the U.S. and began commercial operations in 2024. The company specializes in helium gas exploration and production, focusing on acquiring and developing properties to extract helium gas from underground reserves.

India's largest company by market capitalization, Reliance Industries, has seen modest growth in its stock over the past year. While the Sensex gained about 20%, Reliance share price increased by just over 6% as of November 28. However, the stock has been in a downturn since September, with declines of 2% in September, 10% in October, and approximately 3% so far in November.

The stock reached a 52-week high of ₹1,608.95 on July 8 and a 52-week low of ₹1,185.63 on November 30, 2023. This week, it gained around 2% amid escalating geopolitical tensions between Russia and Ukraine, which analysts expect to benefit oil-producing firms like Reliance.

Analysts believe that rising crude oil prices driven by these geopolitical developments could positively impact Reliance's margins. CLSA, a foreign brokerage, maintained an ‘outperform’ rating on Reliance stock with a target price of ₹1,650, emphasizing that the company’s $40 billion new energy business remains underappreciated by the market.

Reliance plans to establish a fully integrated 20GW solar gigafactory by 2026-2027 and commence cell-to-module production within three to four months. CLSA estimates that this solar business could generate EBITDA of $1.7 billion over the next four to five years and hold a valuation exceeding $30 billion, which is discounted compared to the replacement cost valuation of recently listed Indian solar PV manufacturers.

Technical analysts also express optimism for Reliance in the short term. Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers, suggests traders consider long positions in the ₹1,265–1,290 range, with a stop-loss below ₹1,199 to mitigate risk. Patel targets an upside of approximately ₹1,400 for this trade.

Patel explained that Reliance has been following a classic Elliott Wave 5-wave pattern on the daily chart since March 2023. This rally culminated in July 2024, marking the completion of the fifth wave and initiating a corrective ABC phase. Corrections of this type typically retrace to significant Fibonacci levels.

"Currently, the stock has bounced back from the ₹1,220–1,240 zone, which aligns with the 61.8% Fibonacci retracement level of the five-wave structure. This level often serves as robust support during corrections, signaling potential for base formation. Additionally, the zone coincides with the completion of a bullish Crab harmonic pattern, reinforcing the likelihood of a reversal," Patel concluded.