India’s most valuable company, Reliance Industries, suffered a brutal market cap evaporation of ₹95,407 crore on Thursday, equaling the sharpest single-day loss post-June 2024 slump. The episode highlights brewing vulnerabilities in the Adani rival’s empire.
RIL shares cratered 5.2%, settling at ₹2,702 amid high volumes exceeding 15 million shares. This overshadowed positive cues from RBI’s steady rates and robust GST collections.
Primary culprits: Falling global energy prices and sector rotation. With 60% revenue from O2C (oil-to-chemicals), Reliance absorbs crude shocks acutely. Petrochem demand weakness from Europe and US inventory builds exacerbated the slide.
New-age businesses falter too. Jio added 14 million users quarterly but trails affordability targets. Retail same-store sales growth decelerated to 8% YoY, hit by inflation and festive preponement. ‘Execution risks in pivot to new energy loom large,’ warns Kotak Institutional Equities.
Historical context: RIL’s P/E ratio exceeds 27x, premium to peers. Post-COVID rally delivered 150% returns, breeding complacency. Thursday’s action liquidated leveraged positions, amplifying downside.
Mukesh Ambani’s vision—$100 billion green energy bet by 2030—remains cornerstone. Projects like Dhirubhai Ambani Green Energy Giga Complex progress, but monetization is years away. Upstream gas production dips also pressure cash flows.
Outlook mixed: Bulls target recovery to ₹3,000 on Q3 beat; bears warn of sub-₹2,500 if oil stays depressed. This dip tests retail fervor—over 20 crore demat accounts chase RIL dreams. Resilience defines Reliance; expect strategic responses soon.