"Also with the backing of very strong energy cash flows and partners like Microsoft/Google/Facebook, there is more confidence in delivering on these digitisation plans", it added.
RIL is now between 14 per cent and 17 per cent of the leading Indian equity benchmarks.
Morgan Stanley India strategist Ridham Desai, sees two implications of the rising weight.
First, passive flows keep rising. Secondly, and more importantly, given that several active manager mandates restrict ownership of single stock at 10 per cent of the fund, such active funds will likely continue to be underweight.
"Both these factors create virtuous demand cycle for the stock like we saw between 2006-2007", Desai said.
After listing in 1977, RIL reached $ 100 billion MCap in 2018 as the investment cycle slowed, but is now a $200 billion plus MCap company as it sears up to capitalise on India's $ 1.3 trillion plus TAM in new energy, e-commerce and digital ecosystem, with asset monetization as well.
"We take a look back to see what RIL's strategic investors like Facebook and Google, technology players like Tencent, Amazon, Apple and Exxon / Walmart looked like in terms of business size, valuations and market conditions, when they crossed the $200bn market cap mark", Morgan Stanley said.
In terms of size, RIL's forward year EBIDTA is higher than Amazon, but lower than Exxon. EBIDTA for digital (stake adjusted) plus retail combined is similar to Netflix but 22-40 per cent lower than many of the technology/e-tailers when they crossed the $200 billion MCap mark.
It's one year forward revenues for the two businesses combined are however much lower than these global peers. Standalone energy forward EBIDTA is half of that of Exxon in April 1999, Morgan Stanley said.
"We expect RIL's consolidated earnings to grow at 23 per cent CAGR F20-F22. Amazon had 122 per cent CAGR 2-year forward EPS growth in 2015 vs RIL(ex-energy) business of 52 per cent CAGR, similar to that of Google when it crossed the US$200bn mark in 2007. The lower growth partly reflects the impact of Covid-19, which the Street has built in to last into 2021. Exxon and Walmart also had 37 per cent and 46 per cent CAGR growth expectations in 1999 (when they crossed $200bn Mcap)," the report said.