Reliance Industries share price declined over 4% on Monday amid heavy selling pressure, weighing on the broader market indices. Reliance shares fell as much as 4.13% to ₹1,295 apiece on the BSE.
Reliance Industries emerged as the top loser on the benchmark Nifty 50. The sharp decline in the index heavyweight also dragged the broader index lower, with the Nifty 50 slipping as much as 0.7% during the session.
The billionaire Mukesh Ambani-led Reliance Industries holds the second-highest weightage in the Nifty 50 at 8.87%, after HDFC Bank, which has a weight of 10.94%.
The sharp correction in Reliance Industries share price also led to a significant erosion in its market capitalisation. The company’s market cap slipped below ₹18 lakh crore and stood at approximately ₹17.65 lakh crore, according to exchange data.
Why is Reliance share price falling?
The drop in Reliance share price comes amid the escalating US-Iran war in the Middle East, which continues to disrupt the supply of crude oil through the Strait of Hormuz, raising concerns about potential oil shortages.
Reliance Industries share price has declined over 8% in the past two weeks. The recent sell-off follows the government’s decision to impose export duties on diesel, and aviation turbine fuel (ATF), raising concerns about potential pressure on the company’s refining margins.
Effective March 26, the government revised fuel levies, reintroducing export duties of ₹21.50 per litre on diesel and ₹29.50 per litre on ATF, while keeping petrol exports exempt. The move coincided with a ₹10 per litre cut in excise duty on petrol and diesel.
However, a senior official clarified that the reimposed windfall export taxes on diesel and ATF will not apply to Reliance Industries Ltd’s SEZ refinery due to judicial rulings, PTI reported.
According to a Citi Research report, the export taxes are equivalent to $36 per barrel on diesel and %50 per barrel on jet fuel.
“In FY25, 75% of Reliance’s diesel production and 35% of its jet fuel production were from its SEZ refinery, which we believe, based on 2022 precedent, could be exempt from this tax. If we therefore assume the export tax is applicable only on the non-SEZ volumes, the impact should be largely offset by still-elevated diesel/jet fuel cracks vs pre-conflict levels,” Citi had said in the report.
In a separate note, Jefferies said the reimposed export duty broadly caps diesel/ATF spreads at $20 per barrel for standalone refiners like Reliance.
At 12:15 PM, Reliance share price was trading 3.88% lower at ₹1,298.50 apiece on the BSE.