Anil Ambani owned Reliance Power, Reliance Home Finance fall 5% each; Reliance Infra rises 2%

Anil Ambani SEBI ban impact: Shares of Anil Ambani-led companies including Reliance Power, Reliance Infrastructure, and Reliance Home Finance, continue to experience signifiant volatility today, following regulatory actions by the Securities and Exchange Board of India (SEBI).

Reliance Home Finance shares dipped 5.21 per cent today, hitting a lower circuit at Rs 4 per share, continuing the downward trend sparked by SEBI's recent order. Similarly, Reliance Power shares fell by 5.01 per cent, to Rs 31.11, also reaching their lower circuit limit. In contrast, Reliance Infrastructure shares showed some resilience, rising by 2.16 per cent to an intraday high of Rs 211.23.

The volatility in these stocks comes on the heels of SEBI's decision to bar Anil Ambani and 24 others from accessing the securities market for five years. This action stems from allegations of fund diversion from Reliance Home Finance Ltd (RHFL), leading to significant penalties and restrictions on key officials and entities within the group.

Background on SEBI's Order  

SEBI's investigation revealed that Anil Ambani, along with key managerial personnel of RHFL, orchestrated a fraudulent scheme to siphon off funds under the guise of loans to entities linked to the ADA Group. These loans, provided to companies with little to no assets or cash flow, resulted in massive defaults, placing RHFL's shareholders in a precarious position.

The SEBI order, issued on August 22, 2024, imposes a Rs 25 crore fine on Ambani and bars him from serving as a director or key managerial personnel in any listed company or SEBI-registered entity for five years. Additionally, 24 other entities, including Reliance Home Finance, face fines ranging from Rs 21 crore to Rs 25 crore. RHFL has also been banned from the securities market for six months and fined Rs 6 lakh.

The market reaction reflects growing concerns among investors regarding the future of these companies amidst ongoing legal challenges. Despite the negative sentiment surrounding Reliance Home Finance and Reliance Power, Reliance Infrastructure's slight uptick indicates some investor confidence in its stability.

In response to the SEBI order, Reliance Power issued a statement clarifying that the company was not a party to the SEBI proceedings and that Anil Ambani had resigned from its board of directors following an interim SEBI order in February 2022. The company stressed that the SEBI order has no impact on its business operations.