Two traders have built unusually large positions in Reliance Industries’ futures and options (F&O) contracts, with each holding more than 3% of the company’s market-wide position limit (MWPL), according to a Mint report. The sizeable bets come ahead of the initial public offering (IPO) of Reliance’s subsidiary, Jio Platforms Ltd, and are considered rare for the stock.
National Stock Exchange (NSE) data shows that both traders began building their positions in October and held more than 3% of Reliance’s MWPL. Their exposure increased over the following fortnight, with only marginal reductions towards the end of last week.
The scale of these positions is unusual even by Reliance’s historical standards. Analysts told Mint that they could not recall a single client holding more than 3% of the company’s MWPL, including during Meta’s investment in Jio Platforms in 2020 and the market turmoil triggered by the Covid-19 pandemic.
The rationale behind the trades remains unclear. However, analysts believe the recent decline in Reliance shares may have encouraged traders to position themselves for a potential recovery. The stock has underperformed the Nifty amid sustained foreign portfolio investor (FPI) selling, rising crude oil prices and a weakening rupee.
The activity comes ahead of Jio Platforms’ Rs 30,213-crore IPO, scheduled to open on Wednesday and close on Friday.