PremiumPromoters’ wealth in five Ambani-backed listed firms has jumped by more than 160% from ₹117 crore two months ago to ₹309 crore, data from corporate database Capitaline showed
MUMBAI : As shares of Reliance Group companies such as Reliance Infrastructure Ltd and Reliance Power Ltd soar, promoter Anil Ambani, who last year told a British court that his net worth was zero, has seen the value of shares held by him, his family and other promoter entities, more than double in the last two months.
Promoters’ wealth in five Ambani-backed listed firms has jumped by more than 160% from ₹117 crore two months ago to ₹309 crore, data from corporate database Capitaline showed. This is also a 688% gain from ₹39.28 crore a year ago. Promoter holdings in Reliance Power, Reliance Communications, Reliance Infra and Reliance Capital have seen their value climb by 300%, 225%, 205% and 193%, respectively, in the past two months.
Despite the surge, it is still a far cry from Ambani’s heydays when he was counted among the world’s richest. Ambani’s fortunes soured following the 2G spectrum scam, which led to cancellations of spectrum for many telcos and the subsequent entry of his brother, Mukesh Ambani, into the telecom sector with Reliance Jio, which raised competition and lowered prices, leading to losses for all telcos.
The coal scam also hurt his power business, resulting in Ambani struggling to service the high debt on his companies’ balance sheets.
While the group companies have seen their stock price surge, some of these companies, such as Reliance Communications and Reliance Naval, are undergoing bankruptcy resolution under the insolvency and bankruptcy code (IBC), and any realization from these resolutions will accrue only to the company’s creditors and not to the promoters.
The recent spike in share prices of Ambani’s companies can be attributed to capital infusion by promoters and other investors, asset monetization and progress on debt resolution processes.
On 7 June, Reliance Infra said its board has approved raising ₹550.56 crore by preferential allotment of up to 88.8 million shares and/or warrants convertible into shares of the company to promoter group and an affiliate of Värde Investment Partners. The funds raised would be utilized for long-term resources, to fund growth as well as to reduce debt, the company said.
Reliance Infra has been looking to monetize its assets to reduce its debt for a while. In January, it closed the sale of its Delhi-Agra toll road project to private equity investor I Squared Capital’s Indian roads platform Cube Highways for an enterprise value of ₹3,600 crore. It reduced its debt to ₹8,781 crore as of March 2021 from ₹14,300 crore last year.
Meanwhile, lenders to Reliance Home Finance, led by Bank of Baroda, have picked Authum Investment and Infrastructure Ltd to take over the mortgage lender.
Similarly, creditors of Reliance Capital have sought bids for various assets of the financial services business, including Reliance General Insurance, Reliance Nippon Life Insurance and Reliance Securities.
“Some ADAG group stocks have doubled in the past months on promoters selling their stake, debt cut-down and expected early resolution plan in debt-laden firms. However, we advised investors to stay away from such penny stocks as business fundamentals are still away from recovery," said Jitesh Ranawat, head of institutional sales at Marwadi Shares and Finance.
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