Reliance Industries loses over ₹4 lakh crore in market cap on weak quarterly earnings, shares fall by 2% after block deal

Reliance Industries Ltd. has experienced a major drop in market capitalisation since its peak back in July as India’s most valuable firm, shedding almost $50 billion (₹4.2 lakh crore). The decline has been due to the company’s weak earning performance and economic slowdown, Bloomberg reported on Friday, November 8.

Shares of the diversified conglomerate led by billionaire Mukesh Ambani have barely grown this year and have seen a significant blow on the NSE Nifty 50 Index, dropping by the widest margin in nearly ten years.

A large factor of the recent decline in the company’s stock is its disappointing quarterly results declared last month, the report said. The announcement fell behind analysts' expectations for the sixth consecutive quarter, mainly because of the weaker demand for its primary oil-to-chemicals business, it said.

The oil-to-retail conglomerate announced its second-quarter results on October 14. The company’s revenue remained flat at ₹235,481 crore for Q2FY25 as compared to ₹234,956 crore in the year-ago period, reflecting a modest growth of 0.22%. However, its net profit was at ₹16,563 crore for the September quarter (Q2FY25), declining by 4.78% YoY from ₹17,394 crore a year earlier.

Reliance Industries shares were trading at ₹1,285, down by 1.58% at 12:45 pm on November 8 on the NSE.

Free share bonus

The company offered its investors one free share for every share held at its annual shareholders’ meeting in August. However, it provided no details on the much-anticipated IPOs of its telecom and retail businesses. Meanwhile, Reliance Jio Infocomm Ltd, Reliance’s telecom arm, suffered a loss in subscribers following a hike in tariffs that month, the report added.

Further drop in stock as shares change hands

Shares of the company fell by 2% to an intraday low of Rs 1,278.70 on the BSE after 11.9 lakh equity shares of the company changed hands in a block deal, as per a report by the Economic Times.

Block deals are generally large-volume trades executed outside of the open market. These deals are often carried out by institutional investors or high-net-worth individuals and can lead to shifts in investor sentiments.