Shares of firms controlled by Anil Ambani are taking a loss on Friday after Sebi restricted him and 24 other people, including former high-ranking Reliance Home Finance Limited officers, for five years as part of the investigation into money diversion from RHFL.
Shares Impact
Reliance Infrastructure shares at the Bombay Stock Exchange were down 10.07 percent to ₹211.70, while at the National Stock Exchange, the stock lost 10.91 percent to close at ₹209.99 in a day.
Reliance Home Finance Ltd also recorded a significant drop in its share price, which went down by 5% to ₹4.46 in both BSE and NSE, hitting the lower circuit limit.
Reliance Power shares fell to hit a lower price band of ₹34.48 on NSE and₹34.45 on BSE, down by 5%. The stock touched a high of ₹38.07 on NSE and₹38.11 on BSE in the last session, which was 52 weeks ago.
Background of SEBI’s Action
On Thursday, Sebi strictly punished Anil Ambani and 24 other entities, including former key officials of RHFL. Consequently, RHFL has been barred from participating in the securities market for six months and fined ₹6 lakh.
Moreover, a penalty of ₹25 crore has been imposed on Anil Ambani by Sebi while at the same time banning him from being involved in any way whatsoever with any firm that is listed or an intermediary; this will last five years and he will not occupy any key managerial posts or directorship such as in a listed company.
According to the final order passed by SEBI, Anil Ambani had designed a scheme to fraudulently siphon off funds from RHFL to his group companies through its key management people by disguising them as loans.
Market Reaction
The broader market has stayed strong, while the shares of Anil Ambani Group have been in rage. At the end of the trading session, the BSE Sensex was up by 0.04% or 33.02 points to close at 81,086.21, while the Nifty added a marginal 11.65 points, closing at 24,823.15.
People May Ask
What for has the SEBI banned Anil Ambani and his associates?
The SEBI imposed this ban for a fraudulent scheme by Anil Ambani and key managerial persons in Reliance Home Finance Limited to divert the company’s funds and present them as loans to Ambani-linked entities.
How many years has Anil Ambani been kept out of securities markets?
For five years, Anil Ambani has been debarred from associating in any manner whatsoever with the securities market, either as a director or key managerial personnel.
Which companies’ stocks were affected by SEBI’s action?
The stocks of Reliance Infrastructure, Reliance Home Finance, and Reliance Power suffered a severe fall. They declined by 10.07%, 5%, and 5%, respectively.
What were the penalties that SEBI imposed on Anil Ambani?
Anil Ambani has been fined ₹25 crore by SEBI. RHFL has been fined ₹6 lakh and its access to the securities market has been restricted for six months.
What does this ban really mean for the Anil Ambani business empire?
The ban severely curtails Anil Ambani’s participation in the securities market, as his role would be seriously limited regarding listed companies and market intermediaries. This would thus have implications for the operations and governance of such groups’ business ventures.
What has been the broader market reaction to SEBI’s action against the Anil Ambani Group?
The broader market remained unaffected even as Anil Ambani group shares plunged sharply. On the day of the announcement, both BSE Sensex and NSE Nifty ended with moderate gains.
What are the prospects for Reliance Infrastructure, Reliance Home Finance, and Reliance Power going forward in light of this SEBI ban?
This can further increase the regulatory glare and market reaction, thereby putting additional pressure on the prospects of such companies in the future. Investors will continue to closely watch every move these companies make in response to the ban.
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