Shares of Reliance Industries Ltd., India’s most valuable listed company, fell more than 4 percent on Tuesday, marking their sharpest decline since June 2024. The stock closed 4.5 percent lower, wiping out over $10 billion in market capitalisation and dragging benchmark indices into negative territory.
Given Reliance’s heavy weight in the Sensex and the Nifty 50, the selloff reverberated across the market, pushing both indices to close in the red. The decline came after a strong run-up in the stock, which had gained nearly 29 percent in 2025, far outpacing the broader market.
Retail Sector Signals Raise Red Flags
Investor unease was amplified by signs of stress in India’s retail sector, long considered one of Reliance’s most important growth engines. Fast-fashion retailer Trent Ltd. reported a 15 percent year-on-year decline in average revenue per square foot for the December quarter, highlighting a tougher consumer environment.
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Analysts said the weak performance at peer companies had broader implications. In a recent note, Citigroup warned that intensifying competition was eroding the market share of established players, a comment that weighed on sentiment around Reliance Retail, India’s largest retailer.
Although Reliance’s retail arm is closely held, it is widely viewed as a key driver of the group’s valuation. ICICI Securities had valued the business at more than $103 billion in October, roughly half of Reliance Industries’ total market capitalisation at the time. Any perception of slowing momentum in the sector, investors said, could have outsized implications for the group’s long-term growth narrative.
Oil Supply Disruption Adds to Uncertainty
Concerns were compounded by uncertainty in the global energy market and developments around Reliance’s crude sourcing. The company, which operates the world’s largest single-site oil refining complex at Jamnagar in Gujarat, said it had not received any Russian crude shipments in nearly three weeks and does not expect deliveries in January.
Reliance had earlier disclosed that it halted the use of Russian crude at its export-only refinery in November, as it moved to comply with European Union sanctions. The pause comes at a time when global oil markets are already unsettled, following geopolitical tensions and renewed uncertainty after U.S. actions affecting oil supplies from Venezuela.
For investors, the lack of clarity around future crude sourcing and refining margins introduced another layer of risk, even as the energy business had been a key driver of the stock’s rally earlier this year.
Profit Booking and a Cautious Outlook
Market participants also pointed to profit booking after the stock’s strong performance in 2025. Reliance had benefited from improving refining margins and optimism around energy markets, supported in part by expectations of policy-driven benefits from China.
Looking ahead, analysts remain divided. Morgan Stanley has highlighted several potential catalysts in 2026, including a possible initial public offering of Jio Platforms, expected tariff hikes in the telecom sector and continued strength in refining margins amid relatively benign oil prices.
At the same time, analysts caution that risks remain. Uncertainty around potential U.S. tariffs on Indian goods, a patchy recovery in consumer demand and elevated valuations—Reliance is trading at more than 23 times forward earnings—could limit near-term upside.
The weakness in Reliance shares spilled over into the broader energy sector, with state-run refiners Bharat Petroleum Corp and Hindustan Petroleum Corp falling about 2 percent each. Reliance ended Tuesday at around ₹1,508 on both the BSE and NSE, after touching intraday lows of more than 5 percent, before recovering modestly in early Wednesday trading.
