Mumbai: Shares of India’s most valuable company by market capitalization, Reliance Industries Ltd. (RIL), dipped to its 52-week low of Rs1918.10 during intra-day trading on Friday before closing at Rs1931.40, losing 3.31% on the Bombay Stock exchange even as the bellwether index Sensex lost 2.26%. With this, RIL has lost some 10% in past four trading sessions, eroding more than Rs21,500 crore worth of investors’ wealth. During this time, Sensex has shed 6%.
Sector analysts said the oil refiner was hit by not just weak refining margins and global slowdown but also a growing pessimism due to delay in production of gas from its blocks in the Krishna Godavari gas basin.
”There are concerns due to lower gross refining margins generally, continued stalemate on the lawsuits surrounding KG gas basin as well as pushing back of the expected time for gas production,” said a sector analyst with a Mumbai-based brokerage firm who did not want to be named.
This was being reflected in several brokerages slashing their ’target price’ on RIL by around Rs500 to Rs 2300-2400 levels, he added. Another sector analyst, again on condition of anonymity, said RIL could not be an exception when other commodity stocks, particularly those in the oil and cement sectors, were taking a beating because of global slowdown in demand. ”Things can only get worse in the future as there is a demand-supply mismatch,” he said, referring to the excess supply being built.