Reliance Communications Ltd Hits Lower Circuit Amid Heavy Selling Pressure

Market Performance and Price Action

Reliance Communications Ltd, a micro-cap player in the Telecom - Services sector, witnessed a sharp decline today, hitting the maximum permissible daily loss of 2.97%. The stock’s price moved within a narrow band of ₹0.96 to ₹1.02, ultimately settling near the day’s low at ₹0.98. This closing price is just 1.04% above its 52-week low of ₹0.95, signalling sustained weakness over the past year.

The total traded volume was substantial at 45.92 lakh shares, with a turnover of ₹0.45 crore, indicating active but predominantly one-sided selling interest. Despite this liquidity, the stock failed to attract meaningful buying support, resulting in the lower circuit trigger being hit and unfilled sell orders accumulating on the order book.

Sector and Benchmark Comparison

In contrast to RCom’s steep fall, the broader Telecom - Services sector gained 0.48% on the same day, while the Sensex rose 0.43%. This underperformance by nearly 3.5 percentage points relative to the sector highlights company-specific challenges rather than sector-wide weakness. Notably, RCom’s stock is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — underscoring a persistent downtrend and lack of technical support.

Investor Sentiment and Delivery Volumes

Investor participation has shown signs of rising volatility. On 20 Feb 2026, delivery volume surged to 5.53 lakh shares, a 32.37% increase over the five-day average delivery volume. This spike suggests heightened investor activity, possibly driven by panic selling or short-term traders exiting positions amid negative sentiment. However, the delivery volume remains modest relative to the total traded volume, indicating that a significant portion of trades may be speculative or intraday in nature.

Fundamental and Market Cap Assessment

Reliance Communications Ltd’s market capitalisation stands at ₹271.02 crore, categorising it firmly as a micro-cap stock. The company’s Mojo Score is 3.0, with a Mojo Grade of Strong Sell, upgraded from Sell on 13 Jan 2025. This downgrade reflects deteriorating fundamentals and weak outlook, as assessed by MarketsMOJO’s comprehensive analysis framework. The Market Cap Grade is 4, signalling limited scale and liquidity challenges that often deter institutional investors.

Technical Outlook and Trading Implications

The stock’s failure to hold above ₹1.00 and its breach of multiple moving averages indicate a bearish technical setup. The lower circuit hit today is a clear sign of panic selling, where sellers overwhelmed buyers, causing the price to be locked at the maximum permissible loss. Such circuit limits are designed to prevent excessive volatility, but they also reflect a lack of confidence among market participants.

Unfilled supply on the order book suggests that sellers remain eager to exit positions, but buyers are scarce at current levels. This imbalance could lead to further downside pressure in the near term unless there is a significant change in fundamentals or market sentiment.

Sector Challenges and Company-Specific Risks

The telecom sector continues to face headwinds from intense competition, regulatory pressures, and capital-intensive network upgrades. Reliance Communications Ltd, with its micro-cap status and limited financial flexibility, is particularly vulnerable to these sectoral challenges. The company’s weak liquidity and poor market sentiment exacerbate its risk profile, making it a less attractive option for risk-averse investors.

Investor Takeaway

For investors, the current scenario signals caution. Reliance Communications Ltd’s strong sell rating and deteriorating technical indicators suggest that the stock may continue to face downward pressure. The proximity to its 52-week low and the lower circuit hit highlight the risk of further losses. Investors should carefully evaluate their risk tolerance and consider alternative telecom stocks with stronger fundamentals and better liquidity.

While the telecom sector offers growth potential, micro-cap stocks like RCom require close monitoring due to their volatility and susceptibility to market sentiment swings. Long-term investors may prefer to wait for signs of fundamental improvement or a technical rebound before re-entering positions.

Conclusion

Reliance Communications Ltd’s stock performance on 23 Feb 2026 underscores the challenges faced by smaller telecom companies in a competitive and capital-intensive industry. The lower circuit hit, heavy selling pressure, and unfilled supply reflect a market grappling with uncertainty and risk aversion. Until there is a clear turnaround in fundamentals or sector dynamics, the stock is likely to remain under pressure, warranting a cautious approach from investors.

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