BENGALURU, Nov 22 (Reuters) - Indian shares dropped more than 1% on Monday, dragged by heavyweight Reliance Industries after it decided to halt a stake sale in its oil-to-chemicals business to Saudi Arabia's Aramco, while Paytm extended its fall from a dismal debut last week.

By 0613 GMT, the blue-chip NSE Nifty 50 index was down 1.17% at 17,557.60, while the benchmark S&P BSE Sensex declined 1.2% to 58,919.75.

Billionaire Mukesh Ambani-led Reliance Industries fell as much as 4.18% to its lowest in over two months after halting its proposed $15-billion stake sale in its oil-to-chemicals arm to the Saudi oil producer and pulled back from a potential spinoff of its most profitable unit.

"Reliance shares are mainly driving the indexes down," said Kshitij Purohit, senior manager at CapitalVia Global Research Limited.

Analysts, however, have also said the deal halt may not impact Reliance's balance sheet as it had several factors like a sharp recovery in refining margins, a possible hike in telecom prices and a strong retail business, working in its favour.

The conglomerate dragged Nifty's Energy Index 2.73% lower, with all components on the sub-index trading in the red.

Oil futures, too, slipped about 1% to seven-week lows early in the Asia session before recovering slightly.

Among other shares and sectors, digital payments firm Paytm fell as much as 16.6% in its second day of trading after crashing around 27% on debut last week.

Bharti Airtel rose 5.82% to a record high after the telecom major announced tariff hikes effective Nov. 26.

Global stocks made a wobbly start to the week as the return of COVID-19 restrictions in Europe and talk about hastened tapering from the U.S. Federal Reserve cautioned investors.

Meanwhile, the Indian government moved last week to repeal the three agriculture laws that farmers have been protesting against for over a year. Investors, however, did not immediately react to the decision.

CapitalVia's Purohit expects some impact on agricultural and fertiliser stocks. (Reporting by Vishwadha Chander in Bengaluru; Editing by Subhranshu Sahu, Shailesh Kuber and Uttaresh.V)