Reliance Declines Almost 4% on Monday; Here is What Brokerages Suggest

  • by THO
  • 6 days ago
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By Malvika Gurung

Investing.com — Shares of the Mukesh Ambani-led Reliance Industries (NS:) Limited declined 3.47% and were last seen trading at Rs 2,387.75 apiece on Monday’s session after the conglomerate announced that it would re-evaluate its deal with the global oil major Saudi Aramco (SE:) on Friday.

The deal between the two corporations to have taken the back seat will likely result in a minor setback for RIL, state different analysts. Furthermore, with some correction in the stock due to this development, would turn out to be a good opportunity for investors to buy RIL shares for a longer-term.

In its annual general meeting in 2019, RIL and Saudi Aramco signed a non-binding letter of intent for selling 20% of the former’s O2C business at USD 15 billion to the global oil giant, to achieve a large debt reduction. However, since 2019, Reliance has managed to achieve the same through large stake sales in Jio, retail business and fundraising through the rights issue.

The conglomerate is a debt-free company now and is not in dire need to sell any stake in a rush, states the director of IIFL Securities, Sanjiv Bhasin. 

Brokerage house Morgan Stanley (NYSE:) has put an ‘Overweight’ call on the stock, while JP Morgan has initiated a ‘neutral’ rating, standing strong that ongoing correction is not going to affect the stock’s performance in the long term. 

The announcement will lead to negative sentiment for RIL’s share price but the financial impact of it will be limited, as a significant de-leveraging has already been achieved by the Mumbai-based organisation, adds the brokerage firm.



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