Reliance Industries shares outperformed the broader market in early trade today, reaching a new high. RIL shares rose 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 climb. Within a few minutes of the opening bell, it had reached a new all-time high of 2,826 per share on the NSE, representing a 1.25 percent increase in early morning trades. During this period, the Sensex heavyweight also became the first Indian company to reach a market capitalization of Rs 19 lakh crore.
According to stock market experts, the major reason for Reliance Industries share price rally and market capitalization of Rs 19 lakh crore is the Singapore GRM surging to a record high. They claimed that for every one US dollar increase in the Singapore GRM, Reliance Industries’ earnings increased by approximately four times and that in the aftermath of the Russia-Ukraine war, the Singapore GRM increased by approximately $7 to $8 dollars.
Avinash Gorakshkar, Head of Research at Profitmart Securities, commented on the reason for the increase in Reliance share price and market capitalization, saying, “This rally in Reliance shares can be attributed to rising GRM (Gross Refining Margin) in Singapore.” Reliance Industries Limited’s earnings increased by approximately 4 per dollar increase in GRM. As Singapore GRM has increased by $7 to $8, the market expects Reliance’s petrochemical business to perform well in Q4FY22.”
Profitmart Securities’ Avinash Gorakshkar went on to say that rising crude oil prices are a major reason for the rise in GRM because they provide margin benefits to large petrochemical companies like Reliance.
Santosh Meena, Head of Research at Swastika Investment Ltd, agreed with Avinash Gorakshkar that “Reliance Industries is firing on all cylinders because its petrochemical business is performing exceptionally well in the face of a surge in oil and gas prices, with the Singapore GRM reaching an all-time high. Its telecom business is unaffected by geopolitical tensions or inflation, whereas its retail business is looking for synergies. It is constantly broadening its path in the renewable energy business, which opens up new opportunities for the company.”
“Technically, Reliance share has formed a strong base at the 2250 mark, followed by a smart rally in which it has broken out of a falling channel formation, resulting in fresh bullish momentum.” On the plus side, it has the potential to break through the 3000 mark. On the downside, 2500 should serve as a strong and immediate support level.”