- Reliance shares dropped 2.6%, erasing nearly $5 billion in market value on Nifty 50.
- Reliance's fall cut about 53 points from the Nifty, a seventh of the index's total loss.
- Elon Musk accused unnamed Indian "oligarchs" of blocking Starlink's market entry.
Reliance Industries Ltd. emerged as one of the biggest drags on the Nifty 50 on Thursday after Elon Musk's comments accusing unnamed Indian “oligarchs” of blocking Starlink rattled investors in the telecom sector. Reliance shares fell around 2.6%, wiping out nearly $5 billion in market value. The decline came as the Nifty 50 dropped 1.7%, or around 384 points, from Wednesday's close of 22,603.
The impact of Reliance's fall was amplified by its heavyweight status on the benchmark. The conglomerate accounts for roughly 9% of the Nifty, meaning Thursday's decline in the stock shaved about 53 points off the index, accounting for around a seventh of the benchmark's overall fall.
Bharti Airtel, another major telecom stock, also traded lower and knocked nearly nine points off the Nifty.
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The selling followed a post by Musk on X on Wednesday in which the Tesla and SpaceX chief alleged that Starlink was “being blocked by certain oligarchs” to maintain their “monopolistic chokehold” over Indian consumers. Musk did not name any company or individual, but wrote that readers could “guess who they are” and described the alleged blocking as “a crime against the people of India.”
The comments triggered renewed scrutiny of India's satellite broadband market, where Starlink is set to compete with established telecom players. The communications ministry rejected suggestions that the regulatory framework was discriminatory, calling such claims “baseless and misconceived”.
Starlink, Jio Satellite and Bharti-backed OneWeb have licences to operate in India, although all three still require security clearances. Sunil Bharti Mittal said OneWeb is awaiting its own approvals, while Reliance Jio Chairman Akash Ambani declined to comment on the controversy.
The timing of Musk's comments also adds sensitivity for Reliance as the group prepares to list Jio Platforms, the parent of its telecom and digital businesses. People familiar with the process told Bloomberg that the company is seeking a valuation of about $114 billion, below the $130 billion-$170 billion range discussed when its draft prospectus was filed in June.
Reliance's telecom arm Jio and Bharti Airtel together account for more than 80% of India's broadband users, making any potential shift in the competitive landscape significant for investors.
Thursday's decline also had a direct impact on promoter wealth. With the Ambani family holding 50.07% of Reliance, the stock's fall reduced the value of its stake by around Rs 21,200 crore on paper.
However, the broader market sell-off was not driven by the Musk comments alone. Dealers pointed to the Reserve Bank's rate hike, crude oil prices hovering around $104 a barrel and continued foreign investor selling as key factors behind the weak session.
The day's move underlines the influence of index heavyweights on market performance. A stock does not need to record the steepest percentage decline to become the biggest drag on the benchmark when it carries a large index weight.
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