Extending its decline for the sixth straight session, Reliance Industries lost over 1 per cent in the early trade on the bourses today amid continuous selling pressure, following the CAG report which said the Oil Ministry and DGH have allegedly favoured the company.

The scrip, which carries heaviest weight on the Sensex, fell by 1.36 per cent to hit an yearly low of Rs 875.90 on the BSE, while on the NSE, the stock dipped by 1.34 per cent to a year-low of Rs 875.60.

The market capitalisation of the company has also slipped below the Rs 3-lakh-crore mark, currently at Rs 2,87,569 crore.

During the past five trading sessions, the company’s scrip has diminished by nearly 7 per cent on the bourses.

The stock has come under pressure after a recent report by the Comptroller and Auditor General (CAG) which said that the Oil Ministry and its technical arm, the DGH, allegedly favoured RIL by allowing it to double the development cost of its landmark KG-D6 gas field.

However, the company has denied any wrongdoing.

Banking major HSBC has also downgraded RIL to ‘neutral’ from ‘overweight’ and cut the price target to Rs 1,040 from Rs 1,084.

Meanwhile, the Home Ministry has given unconditional approval for UK’s BP to buy a 30 per cent stake in Reliance Industries’ oil and gas blocks, including the showcase KG-D6 gas fields, for $7.2 billion.

Bank of America Merrill Lynch in a research note has said that more bad news is likely on exploration and production — KG-D6 reserves may be cut.

“We have cut our estimates of KG-D6 gas production for FY13-FY14 to 52 mmscmd from 72-89 mmscmd earlier. We are thus assuming flat volumes until FY14.”

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