New Delhi: The Indian stock market has been on a decline for the last three days. Even heavyweight large cap stocks could not escape its impact. The stock of billionaire businessman Mukesh Ambani's Reliance Industries has also fallen by about 7.6 percent in the last three days. On Thursday, it closed at Rs 2,813.95 with a decline of 3.95 percent. It has fallen more than 12 percent from its all-time high.

Why did Reliance shares fall?

A large part of Reliance Industries' business is Oil to Chemicals (O2C). Currently, oil prices are fluctuating due to geopolitical tensions in the Middle East. This is also affecting Reliance shares.

Till the June quarter, the share of foreign investors in Reliance was 21.75 percent. Now foreign investors are selling in India to turn to markets like China. This is also hurting stocks like Reliance.

When can Reliance see a boom?

It is also quite interesting that Reliance was going through more or less a similar situation during Navratri last year. This Navratri, Reliance stock has fallen below its long-term 200-DMA (Daily Moving Average). It had also come below 200-DMA around Navratri 2023.

However, RIL stock spent barely four trading sessions below the 200-DMA, and soon climbed back up on October 30, 2023. The stock then witnessed a strong rally of 35.3 per cent and made a new all-time high of Rs 3,218 on July 8, 2024. Reliance investors would be hoping for a similar performance again.

What is the brokerage's opinion on Reliance

Both foreign and domestic brokerage firms have a very positive stance on Reliance Industries. CLSA has maintained an 'Outperform' rating on RIL with a target price of Rs 3,300. At the same time, Nomura has also given a 'Buy' rating with a target price of Rs 3,600; Bernstein has raised the target price of RIL to Rs 3,440 per share.

In March 2024, Goldman Sachs said it had given a target price of Rs 4,495 for Mukesh Ambani's company in case of a bull run. Domestic brokerage firm Motilal Oswal has also recommended buying Reliance with a target price of Rs 3,435 per share.

Early Diwali for RIL investors

Reliance's board had approved the bonus issue of equity shares in 1:1 ratio on September 5. This means that every shareholder holding 1 equity share as on the record date will be given 1 share free. This will be Reliance's first bonus share issue in the last seven years and sixth overall.