Wealthy Opinions: Reliance Industries, the stock performance indicate a Holding Company Discount ?

Is the market discounting Reliance Industries (RIL) to be a future holding company?

RIL, India's biggest business group, represents 11.68% of the Index weights. This is far more than any other player in the Index calculation. Most of the time RIL is the one indicating the market movement, but this time the story is dramatically different. On one hand when the Sensex has been rallying over past few weeks (due to FII inflows), the stock has really underperformed the overall Index, and that to by a wide margin - which can be seen from the below chart.

The below chart depicts the performance comparison of Sensex (white line) against RIL (green line), from Jan 2009 till date.

The analyzed period is divided into three parts. The first part (oval shape red coloured) - RIL outperformed the index. The second phase (rectangle shape purple coloured) - performance of both was mix or equal and the third section (oval white coloured) - RIL underperformed index.

In the third phase you can see many notes, indicating major events, as and when occurred, which affected the share price subsequently. Some of these major events which are highlighted below:

Company raised Rs. 1 bn.
GS downgraded the stock to "Sell". - Stock tanked!!
ET report: RIL to invest in nuclear energy.
The management informed the board that it has identified power, telecommunication, financial services, and pharma business for investment in near future.
US Shale gas investment(s).
Hospitality - RIL's acquisition of 14.8% stake from the EIH promoters.

Most of these investments are not core to RIL's business. So the most important questions to be asked at this point is/are:

Are these non-core activities of any major importance to the business?
Is this adding value to the business?

The answer to these questions and other(s), (if any) seems - to be negative (for me). My assessment for this is based on the share price movement as against the index - One is going North and the other South.

Mr. Mukesh Ambani has yet again maintained his top slot, for the third year in a row, as No. 1 wealthiest man in India.

Good for him!! But what about us (shareholders) Mr. Ambani??

Happy Investing!!!