Reliance Loses $15 Billion Market Cap in Bruising Start to 2026

Reliance Industries Ltd. is off to a challenging start to 2026, with its shares down more than 6% in early trading. The selloff has erased about $15 billion from the company's market value, marking one of the worst starts to a year in recent memory. This decline has weighed on India's benchmark equity indices.

Investor concerns have been stoked by weak retail forecasts and rising political pressure from the U.S. over India's purchases of Russian oil. Several Indian retailers have flagged slower-than-expected consumer demand, raising concerns about Reliance's retail performance.

The pressure on the stock intensified further after U.S. Senator Lindsey Graham proposed legislation targeting countries that import Russian oil. This move has pushed Reliance's weekly share decline past 7%, the steepest in over 15 months.

Why Did This Happen?

The selloff is partly a reaction to a broader slowdown in the retail sector. Fast-fashion competitor Trent Ltd. recently reported a 15% drop in average revenue per square foot in the December quarter. Analysts at Citigroup have highlighted the growing competition in the retail space, which could hurt market share.

Reliance's retail business is seen as a key driver of its stock, valued at over $103 billion in October, nearly half of the company's total market cap. Weak performance in this segment has raised concerns for investors.

How Did Markets React?

Reliance's shares dropped 5.2% in early January, heading toward its worst day since June 2024. This decline has also dragged down the NSE Nifty 50 Index, where Reliance has the second-largest weighting. The stock had outperformed in 2025, rising 29% compared to the index's 11% gain.

Market reaction has also been influenced by concerns about U.S. tariffs on Indian goods and the uncertain recovery in consumer demand. The shares currently trade at more than 23 times forward earnings, above the five-year average.

What Are Analysts Watching Next?

Reliance's Q3 earnings, scheduled to be released on January 16, will be a key focus for investors. Goldman Sachs analysts expect the retail segment to see slower growth due to reduced discretionary spending, but anticipate strong performance from the energy business.

Analysts also remain cautious about U.S. policy developments. Morgan Stanley has maintained a positive stance, raising its target price on Reliance shares to Rs 1,847. The firm sees upside potential of nearly 20% and expects refining margins to remain elevated.

Reliance has also signaled a shift in crude sourcing strategies. It has reportedly stopped Russian crude imports, citing regulatory and geopolitical risks. The company has also explored the possibility of importing cheaper Venezuelan oil.

Despite the recent selloff, 35 analysts still maintain a buy recommendation for Reliance, with a consensus target price indicating about 16% upside over the next 12 months.

The company's ability to adapt to shifting crude supply dynamics and geopolitical pressures will be key. Reliance's refining operations have benefited from low-cost Russian crude in recent quarters, but this advantage may be diminishing as global markets evolve.