Share price of Reliance Industries Ltd (RIL) plunged 9% in afternoon session after hitting record high today. The stock, which moved 16.5% higher in a month declined 9% today from its record high to finally close in the red. The euphoria around the stock ahead of the 43rd AGM fizzled out as Chairman Mukesh Ambani opened the meeting. Analysts said sell-off in Reliance Industries stock came as investors followed principle of buy on expectations and sell on announcements.
RIL stock fell up to 9.12% to Rs 1,798 compared to a high of Rs 1978.50 it achieved in the afternoon session.The fall came in the last hour of trade as the 43rd AGM of RIL was in progress.
Market cap of the firm fell to Rs 11.50 lakh crore on BSE. Total 25.28 lakh shares changed hands on BSE amounting to turnover of Rs 489.05 crore. Reliance Industries stock ended 3.71% or Rs 71 lower against previous close of Rs 1,845 on BSE. On Sensex, the share was second-biggest loser after Bharti Airtel which lost 4.24% to close at Rs 564.
Deepak Jasani, Head, Retail Research at HDFC Securities said,"The AGM was once again a platform for showcasing the progress made by the company in its various businesses. The way the stock markets seesawed post 2 pm (when the AGM began) showed the importance of Reliance stock for the Indian markets. The stock price had moved up around 16.5% in this month anticipating announcements at the AGM. Most of the announcements were in line with expectations built till yesterday and the stock price has reacted on the principle of buy on expectations and sell on announcements."
The stock was top loser on Nifty slipping 3.89% or Rs 74 to Rs 1,842 against previous close of Rs 1,917. Earlier, the stock hit an all-time high of Rs 1,978 on the 50-stock index today.
The stock hit intra day low of Rs 1798, down 6.18% against previous close.
RIL and Saudi Aramco had signed a non-binding letter of intent in August 2019 wherein Saudi Aramco was looking at picking up a 20% stake in the O2C business at an enterprise value of $75 bn.
It is now clear that investment by any strategic investor in the O2C business will happen at a lower valuation which was one of the reasons why the stock sold off post the AGM. Moreover, investors were also expecting concrete timelines on the proposed listing of Jio Platforms which was not provided by the management and was also a cause for disappointment. However investment by Google for a 7.7% stake in the company was a key positive announcement in the AGM," Roy said.
RIL share price has gained 21.35% since the beginning of this year and 44% during the last one year.
The large cap stock hit a fresh 52-week low of Rs 867 on March 23, 2020. Since then, the stock has gained nearly 125% on BSE. Total 2.27 lakh shares changed hands on BSE amounting to turnover of Rs 44.04 crore.
Meanwhile, Sensex and Nifty too erased all gains to trade in the red in last 30 minutes. Later, Sensex managed to close 18 points higher at 36,051 and Nifty ended with a minor gain of 10 points at 10,618.