Reliance Industries (RIL) fell by over 2% in morning trade on the bourses today as investors reacted negatively to the oil sector regulator's decision to reject three new natural gas finds by the Mukesh Ambani-led company in the eastern offshore KG-D6 block as discoveries.
RIL shed 2.4% to touch an early low of Rs 921.30 on the Bombay Stock Exchange, while on the National Stock Exchange, it went down by 2.48% to hit a low of Rs 921.
According to reports, the Directorate General of Hydrocarbons has refused to certify three new gas finds by the industrial giant in the highly prolific KG-D6 block as "discoveries", which is a setback to RIL's exploration programme in the Krishna-Godavari Basin.
In addition, analysts said the company's announcement after market hours on Friday that it will buy Bharti Enterprises' entire 74% stake in two insurance joint ventures with France's AXA may have influenced the stock's fortunes.
"The overall sentiment with regard to the stock is weak. Any news, positive or negative takes time to adjust to the market conditions," Religare Securities EVP & head (retail research) Rajesh Jain said.
Bharti Group exited from its financial services joint ventures with AXA and sold its entire 74% stake in their general and life insurance businesses to RIL for an undisclosed amount.
The company had entered into these joint ventures with the AXA group in 2006 and held a 74% stake in both Bharti AXA Life Insurance and Bharti AXA General Insurance.
The decline in the bellwether scrip was instrumental in dragging the BSE key index Sensex down by 119.53 points to 18,149.01 at 1031 hours.