BackRIL share price back above ₹2,500 after windfall tax cut. Key triggers to watch now
The government cut windfall tax less than three weeks after they were imposed
PremiumShares of Reliance Industries Ltd (RIL) surged more than 2% to ₹2,501 apiece on the BSE in Wednesday's opening deals after the government cut windfall tax less than three weeks after they were imposed, offering relief fuel exporter RIL and top crude explorer Oil & Natural Gas Corporation of India (ONGC), which rallied nearly 5%.
“The relief announced by the government for the petroleum sector through reduction in windfall tax and cuts in duties on exports will be a major boost for the sector, particularly for RIL," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The central government has reduced the windfall tax on crude oil imposed earlier this month by about 27% to ₹17,000 a tonne, according to a government order. The tax, which was levied in the form of special additional excise duty was ₹23,250 a tonne earlier. It also exempted overseas shipments from export-focused plants, benefiting Reliance that operates a refinery in a special economic zone in western India.
"RIL shares are rising due to the windfall tax duty cut announced by the Government of India (GoI). This should be taken as an opportunity by traders to book profit or exit their earlier positions taken after the decline in Sensex heavyweight after the imposition of windfall tax around a fortnight ago because review of windfall tax would now be a continuous process," said Saurabh Jain, Vice President — Research at SMC Global Securities.
The move comes as part of a promised recalibration of the tax based on a review of global oil prices. International crude prices have slumped since mid-June on concerns about a potential global recession, at one point erasing all the gains that followed Russia’s invasion of Ukraine.
Investors are also awaiting Reliance Industries' Q1 results as the conglomerate is set to report its earnings for the first quarter of the current fiscal this week on Friday, July 22, 2022. Further, RIL’s AGM tends to be announcement-heavy and expectations run high in the run-up to the annual general meet (AGM) and this year (like the last 3) centers on concrete timelines being announced for IPOs of the Consumer business Jio and Retail.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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