Reliance Shares Slump After Rs 4,563 Crore Block Deal, Dragging Nifty Below 20,000

At 2.00 PM, the NSE Nifty50 index was trading at 19,898 points, down by more than 235 points. At the same time, the S&P BSE Sensex was down 815 points to 66,781.

Reliance Industries Ltd (RIL) shares shed over 3 per cent in early trade on Wednesday after a block deal took place on the bourses. The index heavyweight dragged the market with it as the Nifty50 fell below the 20,000 mark. Almost two crore shares of RIL reportedly changed hands on the exchanges against the one-month daily average of 73 lakh shares.

At 1 PM, shares of RIL were trading down 2.30 per cent at Rs 2,380. However, according to a Moneycontrol report, in early trade stocks touched a two-month low of Rs 2,355 per share. It contributed around 32 points to the Nifty50's decline. 

Around 2 PM, the NSE Nifty50 index was trading at 19,898 points, down by more than 235 points, while the S&P BSE Sensex was down 815 points to 66,781

As per the report, around 1.9 crore shares or 0.3 per cent equity of the RIL changed hands on the exchange in Rs 4,563 crore deal. The information regarding buyers and sellers in the transaction has not been made public as of now.

Factors That Dragged Reliance Industries's Scrip

The recent government decision to raise the windfall tax on domestic crude oil sales to Rs 10,000 per tonne has added downward pressure on the RIL stocks, as per reports. The windfall tax hike has come at a time when steadily rising Brent crude prices reached a 10-month high of $95 per barrel.

While the consistent increase in Brent crude prices is generally beneficial for the oil refining sector's profit margins, it also raises the possibility of further government adjustments to windfall gains taxes, said the Moneycontrol report. It's worth noting that the windfall tax was raised just two weeks prior to the recent increase, from Rs 6,700 per tonne.

Despite the stock's decline, as per the report, brokerage firms maintained a positive outlook on the long-term growth prospects of the Reliance conglomerate. Jefferies believes that the stock's more than 6 per cent correction over the past month has made its valuations attractive.

Additionally, the firm has projected to cut capital expenditure for RIL's telecom and retail divisions by FY25, potentially resulting in robust free cash flow for the conglomerate.