Reliance Industries Surges 12% Boosting Indian Benchmarks

Reliance Industries Limited (RIL) saw its shares climb sharply by 11.6 percent on Monday, marking the most significant single-day gain since April 2020. This surge added nearly ₹1.83 trillion to the company's market capitalization, fueled by a record quarterly profit announcement. The stock closed at ₹1,300, reflecting strong investor confidence and pushing key Indian stock indices higher.

The rise in Reliance’s shares had a notable effect on the Nifty 50 index, with the indicative price rising as much as 2.8 percent during the closing auction session compared to a gain of 1.2 percent before. The index ultimately settled 1.68 percent higher at 23,440.8 points, while the Sensex gained 1.66 percent to close at 75,692.78. Reliance alone accounted for almost half of the increase in the combined market capitalization of Nifty 50 constituents on the day.

Reliance’s valuation has traditionally been assessed using a sum-of-the-parts approach, as it operates through multiple business segments with varying growth prospects. A major development recently has been the listing of Jio Platforms, the digital arm of Reliance, which resolved part of the valuation puzzle by making its stake value more transparent. Reliance holds a 64.5 percent stake in Jio Platforms, now valued at ₹8.37 trillion. Despite Reliance’s rally, Jio Platforms’ shares fell slightly by 0.74 percent, closing at ₹1,420.

Market analysts point out that Jio Platforms still trails competitors like Bharti Airtel in average revenue per user (ARPU). Gaurav Sharma, head of research at Globe Capital, noted, "Given current market volatility, Jio’s rally and listing gains were exceptional. When Jio revises its ARPU upwards, it could trigger a short-term rally in its stock." This suggests potential for future growth in the digital services segment, which remains highly competitive.

Options trading activity around Reliance was particularly intense on Monday. The company accounted for more than 20 percent of all stock options contracts traded. The November ₹1,300 call option was the most actively traded, with 176,350 contracts, and its premium surged over five times to ₹19.4. This indicates strong bullish sentiment among traders betting on further price increases.

Sharma also highlighted how geopolitical events have benefited Reliance’s refining business. "Disruptions affecting refineries in Russia and Saudi Arabia, combined with the ongoing Russia-Ukraine conflict, have worked in RIL's favor," he said. Heavy crude grades such as Venezuelan crude, which many refineries cannot process, are better handled by Reliance’s refinery, the largest grassroots refinery globally. This unique positioning has strengthened Reliance’s operations amid supply challenges in the global oil market.

Open interest in the ₹1,200 call option dropped by 58 percent even as its premium quadrupled from ₹20 to ₹87. This suggests that traders who previously bet against Reliance breaking this level are closing out their positions. Meanwhile, put options at strikes between ₹1,220 and ₹1,260 saw increased writing activity, signaling that some traders expect the stock to maintain above these levels through November expiry.

Broader market activity was positive, with the Nifty 50 climbing 387.7 points or 1.68 percent. The index is now 5.7 percent above its 52-week low but remains 11.1 percent below its all-time high. Advancing shares outnumbered declining ones by a ratio of more than two to one, and the total market capitalization of companies listed on the National Stock Exchange rose approximately ₹7.7 trillion.

Sector-wise, metal and oil and gas stocks led gains following Reliance’s strong performance. The Nifty Midcap 50 and Nifty Midcap 100 indices rose by 1.24 percent and 1.19 percent respectively, while the Nifty Smallcap 250 and Nifty Smallcap 50 gained 1.37 percent and 0.43 percent.

Apurva Sheth, head of research at Samco Securities, commented on Reliance’s technical outlook: "The stock has decisively broken above a prolonged downward trendline, indicating that selling pressure may be easing and fresh buying interest is entering. This breakout coincides with several fundamental triggers that could enhance the investment narrative for RIL going forward."

Reliance Industries remains a key player in India's economy and stock market, with diversified operations spanning refining, petrochemicals, telecommunications, and retail. The company’s recent results and stock performance reflect its resilience and the market’s recognition of its strategic advantages, especially amid global uncertainties affecting energy and digital sectors.