The troubles for business magnate Anil Ambani do not seem to be easing. Following a significant announcement from the Securities and Exchange Board of India (SEBI), shares of his companies plummeted sharply. Yes, the last trading day of the week turned out to be unfavorable for Anil Ambani as SEBI imposed a five-year ban on him. Along with Anil Ambani, 24 other entities have also been sanctioned.
The news led to a swift decline in the share prices of Anil Ambani’s companies, particularly in Reliance Infrastructure, Reliance Power, and Reliance Home Finance, which saw a dramatic fall of up to 14% within just four hours. During this period, the market capitalization of these companies decreased by ₹2,126 crores. Let’s explore the extent of the financial damage faced by Anil Ambani.
Impact on Share Prices
Following SEBI’s announcement, Reliance Power experienced a significant drop in its share price. By noon of the trading day, shares of Reliance Power had declined by more than 5%. After three days of considerable gains, the company’s stock plummeted post the SEBI news. Similar declines were observed in the shares of Reliance Infrastructure and Reliance Home Finance.
Financial Losses Breakdown
Reliance Infrastructure
In Friday’s trading session, Reliance Infrastructure Limited saw the steepest decline. The company’s shares fell by 14.19%, reaching a low of ₹202. Consequently, the market capitalization of the company fell to ₹8,280 crores, resulting in a loss of ₹1,172 crores.
Reliance Power
Reliance Power’s shares had previously hit a record high of ₹38.07 earlier in the day. However, after the SEBI news broke, shares dropped by 9.51%, closing at ₹34.45 due to the lower circuit. The market capitalization of Reliance Power fell significantly from ₹13,830 crores, leading to a loss of ₹932 crores.
Reliance Home Finance
Shares of Reliance Home Finance also fell sharply, hitting a lower circuit level of ₹4.46, marking a decline of over 5%. The company incurred a loss of ₹22 crores during this downturn.
Total Financial Impact
Collectively, the three companies suffered a staggering loss totaling ₹2,126 crores within just four hours after the SEBI announcement, which involved a ban due to alleged fund diversion linked to Anil Ambani and previous senior officials of Reliance Home Finance.
Anil Ambani’s Current Wealth
According to the Reliance Anil Dhirubhai Ambani Group’s official website, Anil Ambani remains the chairman of the group, which includes Reliance Capital, Reliance Communications, Reliance Infrastructure, Reliance Entertainment, Reliance Power, and Kokilaben Dhirubhai Ambani Hospital. These companies represent potential revenue sources for him. Despite recent challenges, Times of India reported that Anil Ambani’s net worth stands at approximately ₹20,444 crores, with his residence valued at ₹5,000 crores.
Overview of the Case
SEBI’s actions stem from allegations of fund diversion from the company. Anil Ambani has been penalized with a fine of ₹25 crores and banned from holding directorial positions or management roles in any listed company or registered intermediary in the securities market for the next five years. Additionally, SEBI imposed a fine of ₹6 lakhs on Reliance Home Finance and barred the company from trading for six months.
The detailed 22-page final order from SEBI indicated that Anil Ambani, with the assistance of senior management at Reliance Home Finance Ltd., orchestrated a fraudulent scheme to withdraw funds disguised as loans to associated entities. Despite strict directives from the board against such lending practices, the management disregarded these orders, indicating a significant governance failure influenced by Anil Ambani.
