Reliance Home Finance, Reliance Infra, and Reliance Power Suffer Significant Losses
Shares of Reliance Dhirubhai Ambani Group (ADAG) companies took a major hit after India's market regulator, SEBI, banned Anil Ambani and 24 others, including top executives from Reliance Home Finance, from the stock market for five years. This caused the share prices of several ADAG companies to drop sharply.
Sharp Declines in ADAG Stocks
Reliance Home Finance shares initially rose by 5% during early trading, but after SEBI's announcement, the stock quickly fell to a 5% lower limit, showing that investors were worried.
Reliance Infrastructure was hit the hardest, with its share price dropping by 12% during the day, reaching a low of ₹201.99 per share on the NSE. Although it recovered slightly to ₹205.50 per share, it still ended the day down by 13% compared to its previous close of ₹235.71.
Reliance Power also experienced a decline. Despite a strong start in the morning, the stock hit its upper limit early on, but later faced selling pressure, closing with a 5% drop.
SEBI's Action Against Anil Ambani and Executives
SEBI's ban on Anil Ambani and 24 others is due to their involvement in a financial fraud at Reliance Home Finance Ltd. (RHFL). The investigation revealed that large amounts of company funds were misused through shady loan disbursements, resulting in significant losses for shareholders.
As part of the punishment, SEBI has not only banned Anil Ambani and others from participating in the stock market for five years, but also fined him ₹25 crore. The ban also prevents Ambani from holding any directorial or key managerial roles in listed companies during this time.
Impact on Other ADAG Stocks
Trading in other ADAG stocks, including Reliance Capital, Reliance Communications, and Reliance Naval and Engineering, was suspended on the day of SEBI's announcement, adding to the uncertainty surrounding the group's future.
This event has dealt a significant blow to the ADAG group, leaving investors wondering how the companies will manage the fallout from SEBI's strict measures.