Reliance Communications Ltd Hits Lower Circuit Amid Heavy Selling Pressure

Market Performance and Price Action

On 21 Jan 2026, Reliance Communications Ltd’s share price declined by 3.03%, closing at ₹0.96, just above its lower circuit price of ₹0.95. The stock’s price band for the day was ₹0.95 to ₹0.99, with the maximum loss triggering the circuit breaker mechanism to curb further decline. This marked the third consecutive day of losses, cumulatively eroding 8.57% of the stock’s value over this period.

The total traded volume was substantial at 21.56 lakh shares, indicating heavy participation from sellers. However, delivery volumes fell by 15.45% compared to the five-day average, signalling a shift towards short-term speculative trading rather than long-term investor commitment. The turnover for the day stood at ₹0.21 crore, reflecting the micro-cap nature of the stock with a market capitalisation of ₹265.49 crore.

Sector and Benchmark Comparison

Reliance Communications underperformed the Telecom - Services sector, which declined by 0.74% on the same day. The benchmark Sensex also fell by 0.77%, underscoring a broadly negative market environment. Despite the sector’s relatively moderate decline, RCom’s sharper fall highlights company-specific challenges and heightened risk perception among investors.

Technical Indicators and Moving Averages

Technically, the stock is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a sustained downtrend. This technical weakness compounds the negative sentiment, as the stock fails to find support at any conventional technical levels. The persistent decline below these averages suggests that short-term and long-term momentum remain firmly bearish.

Investor Sentiment and Liquidity

Investor participation has notably diminished, with delivery volumes dropping to 5.68 lakh shares on 20 Jan 2026, down from the recent average. This decline in genuine investor interest, coupled with high intraday volatility, points to panic selling and unfilled supply overwhelming demand. Despite this, the stock remains sufficiently liquid for small trades, with a trade size capacity of approximately ₹0.01 crore based on 2% of the five-day average traded value.

Mojo Score and Analyst Ratings

MarketsMOJO assigns Reliance Communications a Mojo Score of 3.0, categorising it as a Strong Sell. This rating was upgraded from Sell to Strong Sell on 13 Jan 2025, reflecting a worsening outlook. The company’s Market Cap Grade stands at 4, indicating its micro-cap status and associated liquidity and volatility risks. The downgrade in rating aligns with the stock’s ongoing price weakness and deteriorating fundamentals.

Fundamental Challenges and Outlook

Reliance Communications operates in the highly competitive Telecom - Services sector, which has been under pressure due to intense pricing competition, regulatory challenges, and capital-intensive network investments. The company’s micro-cap status limits its ability to raise capital efficiently, exacerbating financial strain. The persistent downtrend and lower circuit hits suggest that investors remain unconvinced about the company’s turnaround prospects in the near term.

Implications for Investors

For investors, the stock’s current trajectory signals caution. The lower circuit hit is a clear indication of panic selling and unfilled supply overwhelming demand, which could lead to further downside risk. The absence of strong buying interest and the stock’s failure to hold above key technical levels suggest that recovery may be protracted. Investors should weigh the risks carefully and consider portfolio diversification to mitigate exposure.

Historical Context and Future Prospects

Reliance Communications has struggled to regain investor confidence over the past year, with its share price consistently trending downwards and hitting new lows. The recent three-day losing streak and the latest lower circuit hit reinforce the fragile state of the stock. Without significant operational improvements or strategic initiatives, the stock is unlikely to reverse its fortunes imminently.

Market participants will closely monitor upcoming quarterly results and any announcements regarding debt restructuring or asset monetisation. Until then, the stock remains vulnerable to further volatility and downside pressure.

Summary

Reliance Communications Ltd’s plunge to its lower circuit limit on 21 Jan 2026 underscores the severe selling pressure and negative sentiment engulfing the stock. The combination of weak fundamentals, technical breakdowns, and falling investor participation paints a challenging picture for the company. While the broader telecom sector and market indices experienced moderate declines, RCom’s sharper fall highlights company-specific risks. Investors are advised to exercise caution and consider alternative investment opportunities with stronger fundamentals and momentum.

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