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Billionaire Mukesh Ambani-led India’s most valuable company (), today saw Rs 1.26 lakh crore worth of market cap erosion after the government slapped an export tax on fuel and windfall tax on domestic crude. The stock of oil explorer eroded Rs 25,800 crore worth of investor wealth.
RIL shares nosedived 9 per cent to hit the day’s low at Rs 2,365. The stock, however, recovered later to end the day at Rs 2,406 but was still down 7.3 per cent from Thursday’s closing price. For Reliance, it was the stock’s worst day since November 2020.
On the other hand, ONGC shares crashed 13.3 per cent to end the day at Rs 131.40.
The finance ministry has introduced export duties for petrol, diesel and jet fuel to help maintain domestic supplies and imposed a windfall tax on oil producers that have benefited from higher global crude oil prices.
Global brokerage JPMorgan, however, termed the stock reaction as excessive. In a note to investors, it said the fall offers an attractive entry opportunity. It said RIL would have strong underlying cash flows and earnings even after paying export tax.
Morgan Stanley said ONGC would be most negatively impacted, while
could manage the changes better.
The measures “highlight the tightening energy market outlook,” the brokerage wrote in a note, adding the announcement was incrementally negative for sector valuations.
Sushil Choksey of Indus Equity Advisors, who has been tracking RIL stock closely, said today’s sharp reaction was more of a sentiment play. “Reliance has a valued mix between various products. So they will have to move their product basket according to what the tax is and what is profitable,” he told ET Now.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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