RIL shares in focus: Conglomerate may overtake IOCL to become India's number 1 oil refiner; all you need to know

The report added that Reliance has held preliminary talks for the acquisition of Nayara, which will help it overtake state-owned Indian Oil Corporation (IOC) to become India's No. 1 oil refiner as well as give a meaningful presence in the fuel marketing space.

Top Rosneft officials have visited India at least thrice in the last one year, including visits to Ahmedabad and Mumbai, for talks with potential investors.

For Rosneft, which is looking to exit from Nayara due to Western sanctions limiting its ability to repatriate full earnings from India operations, a potential buyer could be one who has substantial earnings overseas or is an international company – both of which could make quick overseas payouts for the stake.

Being a large exporter of fuel, Reliance has substantial overseas income, the report added.

While emails sent to Rosneft for comments remained unanswered, a Reliance spokesperson said, "As a policy, we do not comment on media speculation and rumours."

"Our company evaluates various opportunities on an ongoing basis," the spokesperson said. "We have made and will continue to make necessary disclosures in compliance with our obligations under the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and our agreements with the stock exchanges."

Rosneft, which had in 2017 acquired Essar Oil in a $12.9 billion deal, is unable to get full financial benefits from its Indian operations, including repatriating earnings, due to international sanctions. Essar Oil was subsequently named Nayara Energy.

The report added that Adani Group politely declined the offer to invest in an oil refinery, which is considered a sunset business given the energy transition planned worldwide.

Nayara will help it cross IOC's 80.8 million tonnes-a-year capacity to become the No. 1 refiner in the country. But more importantly, the 6,750 petrol pumps of Nayara would help it gain a meaningful share in the fuel retailing business. Reliance has just 1,972 petrol pumps out of 97,366 outlets in the country.

The report added that for both Oil and Natural Gas Corporation (ONGC) and IOC, the valuation being sought by Rosneft is too high.