Reliance falls 3% post AGM but Jio seen as game-changer

Shares of Reliance Industries fell 3 percent intraday after Chairman Mukesh Ambani announced details of Reliance Jio's launch, which analysts believe will likely disrupt the telecom sector, which is already saddled with debt.As Ambani started rolling off details of Jio's cut-throat pricing strategy, the stock early on traded with a 1 percent gain but gave it up and steadily head lower and ended down 2.7 percent. It touched an intraday high of Rs 1,072.55 and an intraday low of Rs 1,026.25 per share on the BSE.

Why was the market spooked?

Motilal Oswal feels that there is a big concern on the timeline of achieving operating break-even given the tariff policy deployed. It expects Reliance Industries shares to remain under pressure in near-to-medium-term and will closely monitor Reliance Jio's rollout and effectiveness, and how competitors react.

JP Morgan says when Reliance Jio is commercially launched, there would be a material opex (operational expenditure) and capital charge increase into the profit and loss given the Rs 150,000 crore of capital spending. However, it does not see any material impact of the Justice AP Shah committee on RIL.  It has a target price of Rs 1070 on RIL.