Performance of Reliance Industries Stock has turned down the mood of many long-term investors in the market. Meanwhile, there are some facts and news which are looking positive for Reliance Industries. So, to know this reason behind how did Reliance upset the long-term investors in the market and what things are going well for the company, go through this blog.
Indian Conglomerate Reliance Industries and the company with the highest market value in terms of market capitalization has witnessed a very fruitful period in 2020 whether in terms of Acquisitions, Investment from Strategic Investors, or many more. These strategies and operations of the company won the hearts of the long-term investors, but the poor performance of the stock against the benchmark had now disheartened the sentiments of the long-term investors in the market.
In the past 5 months, Reliance Industries Stock has underperformed the Nifty 50 Index by a huge 36%. This huge underperformance by this giant organization was not liked by the investors in the market.
On the other hand, Foreign Portfolio Investors (FPIs) have increased their stake in Reliance Industries at its all-time high levels. So, let’s discuss in detail the reasons behind developing interest in FPIs in this stock.
Performance over Last 6-Months- Nifty 50 vs. RIL
1) FPI Shareholding in Reliance Industries at Record High:
FPI Shareholding in Reliance Industries at Record High
2) Declining Weightage of Reliance in Nifty-50 Index- MoM Trend:
Also, the weightage of Reliance Industries in Nifty 50 has reduced from 14.9% in September 2020 to 10.2% in April 2021.
3) Why FPIs Interest in Reliance Industries is Rising?
i) Rising contribution of consumer-focused businesses (Retail & Jio) to the Consolidated Performance:
Rising Contribution of consumer-focused businesses.
ii) RIL’s Net Debt-free Status :
iii) ESG Parameters
4) FPIs Total Portfolio:
Currently, Reliance Industries is having 2 growth engines mainly Reliance Jio and Reliance Retail. FPI may further continue to increase the stake in the company post listing of Jio and Retail as well. Hence, this company with the presence of 2 growth engines should be on the investor’s horizon from a long-term perspective. But should invest only with proper research and after consulting a financial advisor.