Investments by tech giant Google and its mega 5G plan for India announced at Reliance Industries' 43rd annual general meeting (AGM) failed to enthuse investors as the stock dipped 3.7 per cent post the AGM. This was the second worst fall for the RIL share price post any AGM (over the previous close) in the last two decades. It had fallen the most, albeit only slightly lower (3.8 per cent), post its AGM on August 03, 2005.
The today's fall in the stock happened after it was announced that the much-awaited RIL-Saudi Aramco will get delayed. "Deal with Saudi Aramco hasn't progressed per original timeline due to unforeseen situation in energy market and COVID-19 situation. We value our two-decade relationship with Aramco and are committed to long-term partnership," RIL Chairman Mukesh Ambani said in the AGM.
Also Read: What is Reliance Jio Glass?
With this, RIL investors lost nearly Rs 1.26 lakh crore during the day. The company's share price had surged almost 10 per cent in its 42nd AGM held in August 2019.
There was some profit booking too. "The Nifty rose to 10,830 in the first half of the trading session, led by Reliance and technology companies. However, the market fell sharply in the second half on the back of strong profit-taking in Reliance Industries and liquidation in financials," Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities in a note.
The share price had moved up around 16.5 per cent this month anticipating announcements at the AGM. According to Deepak Jasani, Head Retail Research, HDFC Securities, "The way the stock markets seesawed post 2 pm (when the AGM began) showed the importance of Reliance stock for the Indian markets. Most of the announcements were in line with the expectations built till yesterday and the stock price has reacted on the principle of buy on expectation and sell on announcements."
Ambani announced that Google has agreed to invest Rs 33,737 crore to buy a 7.7 per cent stake in RIL's technology venture, adding to a slew of investments since April that has crossed Rs 1.52 lakh crore. "Jio has designed and developed a complete 5G solution from scratch. It will be ready for trials as soon as 5G spectrum is available and can be ready for field deployment next year," he added.