The last time you could buy Reliance Industries share below ₹1000 a piece was in mid-2018
- Coronavirus has wiped out all Reliance Industries’ gains in the last two years.
- Since mid-2018, RIL stock has been trading above ₹1000 a piece.
- Its share price has plummeted 32.6% between February 19 and March 16.
- On March 9, the Ambani-led conglomerate saw its worst share price fall in 12 years and its market cap fell to ₹7 lakh crore, losing its tag as India’s most valued company to TCS.
However, its share price plummeted 32.6% between February 19 and March 16 during the massive selloff triggered by Coronavirus.
On March 9, the Ambani-led conglomerate saw its worst share price fall in 12 years and its market cap fell to ₹7 lakh crore, losing its tag as India’s most valued company to TCS. However, the former soon recovered.
Ambani l ost a whopping $16.1 billion in a month after panic about the novel coronavirus crashed the stock markets, according to the Bloomberg Billionaire Index. RIL’s stock on March 16 alone crashed 8.42% to ₹1012. Ambani also lost the tag of 'Asia's richest man' to internet billionaire Jack Ma.
Ambani however has bigger problems. While his telecom and retail businesses are going strong, his oil refining business is directly linked to the price of crude oil. As Saudi Arabia and Russia wage a price war, the commodity will wreak havoc with its complicated calculations as an offshore refiner —-keeping investors on the edge. As much as three-fifths of RIL’s operating profits come from oil and petrochemicals.
RIL’s fortunes are also tethered to the outcome of the oil war and how well Saudi is successful in ‘stabilizing’ them. Investors fear Reliance Industries might not be able to close its $15 billion deal with Saudi state-owned company Saudi Aramco it announced in August last year.
Yet, analysts are hopeful that Ambani’s plans to achieve zero net debt can re-rate the stock. “We expect RIL to emerge as a relatively safer play amid commodity segment volatility due to its dynamic crude sourcing, enhanced integration, feedstock flexibility and start-up of upgrade projects. Also, RIL's LOI with Saudi Aramco to sell a 20% stake for$15bn should help support valuations,” said a report by UBS.
Mukesh Ambani has lost at least $17 billion in 26 days as Coronavirus fears dent RIL shares
Here’s how Mukesh Ambani lost $5.8 billion in a day