Reliance Industries’ shares defied the broader market’s weakness and touched a record high in early trade today. RIL shares were up 1% to 2,802, giving the company a market capitalization of Rs.19 lakh crore.
Today, Reliance shares opened with a near-$20 per share downside gap but quickly began to increase. Within minutes of the opening bell, it soared to a new all-time high of 2,826 per share on the NSE, registering a 1.25 per cent gain in early morning trades. During this period, the Sensex heavyweight also became the first Indian business to reach a market capitalization of 19 lakh billion.
According to stock market analysts, the surge in the Singapore GRM to a record high is the primary reason for Reliance Industries’ share price increase and market capitalization reaching Rs. 19 lakh billion. They stated that for every one dollar increase in Singapore GRM, Reliance Industries’ earnings increase by approximately four, and that in the post-Russia-Ukraine war period, Singapore GRM increased by approximately $7 to $8 dollar.
Avinash Gorakshkar, Head of Research at Profitmart Securities, stated, “This increase in Reliance shares can be ascribed to Singapore’s rising GRM (Gross Refining Margin). Reliance Industries Limited’s earnings increase by around 4% for every dollar increase in GRM. As Singapore GRM has increased by around $7 to $8, the market anticipates good Q4FY22 results from Reliance’s petrochemical division.”
Avinash Gorakshkar of Profitmart Securities added that rising crude oil prices are a major factor for the increase in GRM, since they help large petrochemical businesses such as Reliance.
Santosh Meena, Head of Research at Swastika Investmart Ltd, concurred with Avinash Gorakshkar’s assessment “Reliance Industries is firing on all cylinders due to the success of its petrochemical business, which has benefited from a surge in oil and gas prices, with the Singapore GRM reaching an all-time high. Its telecom business is unaffected by geopolitical tensions and inflation, while its retail division is investigating synergies. It is constantly increasing its footprint in the renewable energy sector, which creates further potential for the organisation.”
“Technically, the Reliance share formed a firm base at the 2250 level and then staged a sharp rally, breaking out of a falling channel formation and reestablishing positive momentum. On the plus side, it has the potential to climb over the 3000 level. On the downside, 2500 should serve as a solid and immediate support level.”