The stock has been marred by legal and regulatory overhang, coupled with weak petrochemicals demand growth and lower gas production from the KG basin, which shifted investor focus to more lucrative frontline stocks in banking, capital goods and technology space.
RILs total market turnover on the BSE and the NSE put together stands at R25,336.09 crore so far this year. The companys turnover had declined to R75,817.60 crore in CY13 from R78,246.75 crore in CY12.
The value of shares traded in the energy giant has declined from the peak of R2.8 lakh crore in CY08, show Bloomberg data. Data also show that RILs stock has given returns of less than 4.5% in the last four months, compared with near 6% gains seen in the Sensex.
Infosys topped the list of most active scrips in the four months of 2014 with a total market turnover of R35,549.78 crore, followed by Axis Bank (R32,872.50 crore), ICICI Bank (R32,668.13 crore), State Bank of India (R29,822.52 crore) and TCS (R26,849.68 crore).
Even as RIL touched a 52-week high recently, shares of banking and capital goods companies gained more attention in the backdrop of the general election. Hopes of a stronger and a more stable government have led to a sharp rally in some banking and cyclical stocks.
The BSE Capital Goods index has given returns of 18.5% in the calendar year and Bank Nifty has risen nearly 13%.
Analysts tracking the oil and gas industry said the RIL scrip was first dented by rating downgrades by brokerages between January and December 2012, due to declining gas production in the KG-D6 basin and the tussle with the government over gas pricing.
Now, the company is caught up in a gas pricing dispute after the Election Commission (EC) asked the government to defer the new and likely doubled price of natural gas produced by companies, such as RIL till, after the elections are completed.
Markets had high expectations from the KG basin gas fields. However, gas output from KG-D6 block has been continuously falling, and many prospective E&P blocks have been relinquished due to the non-viable quantity of hydrocarbon find. The E&P business was below market expectations and that prompted brokerages to downgrade the stock, said Gagan Dixit, oil & gas analyst, Quant Broking.
The oil ministry and RIL are locked in a dispute over recovery of cost for developing the country's key natural gas field in the KG basin. Reliance blames geological factors for the lower gas output while the ministry has sought to penalise the company for the same.
Units D1 and D3, which started production from Q1 FY10, are the two most prolific fields in the D6 block, which were together expected to produce 80 mmscmd by the first quarter of FY12. In the first quarter of operations, the output averaged 19 mmscmd against a target of 20 mmscmd.
While the two fields were not able to meet the targets for each quarter, RIL kept on increasing its production consistently till the fourth quarter of 2010 when it produced 59 mmscmd of gas, which coincided with its target for the same quarter.