3 Reliance ADAG stocks tank up to 14% after SEBI order

Shares of three Reliance ADAG entities fell up to 14.19% after market regulator SEBI barred the industrialist and 24 others from the securities market for five years. Reliance Infrastructure Ltd shares opened higher but dropped to ₹202 on the BSE as soon as the SEBI order came, recording a 14.19% fall. At the current share price, Reliance Infra shares are trading 33% down compared to a one-year high of ₹308 touched on April 4, 2024. The current market cap of the integrated power utilities company stands at ₹8,160.30 crore.

Reliance Power Ltd, a power generation company, has seen its share price drop 5% today, hitting 34.45%. At the current share price of ₹36.26, its m-cap stands at ₹13,838.46 crore. Reliance Home Finance shares also fell ₹4.9% on the BSE.

The correction in the shares of the listed companies of Reliance ADA group was seen following a SEBI order issued today, which barred Anil and 24 other entities, including former officials from Reliance Home Finance (RHFL), from the securities market for five years for the alleged diversion of funds from RHFL.

While RHFL has been suspended from the market for six months and fined ₹6 lakh, fines have been imposed on former RHFL officials such as Amit Bapna (₹27 crore), Ravindra Sudhalkar (₹26 crore), and Pinkesh R. Shah (₹21 crore). Anil will face an individual penalty of ₹25 crore.

These fines have been imposed on the said entities for either allegedly receiving illegally obtained loans or serving as intermediaries in facilitating the unlawful diversion of funds from RHFL. As per SEBI, RHFL disbursed a total of ₹9,295.25 crore in loans to 45 GPCL entities, comprising ₹8,470.65 crore in recorded loans and ₹824.60 crore in unaccounted disbursals. In addition, a ₹25 crore penalty each has been imposed on: Reliance Unicorn Enterprises, Reliance Exchange Next, Reliance Commercial Finance, Reliance Cleangen, Reliance Business Broadcast News Holdings, and Reliance Big Entertainment Private.

In its findings, SEBI said that Anil, with the help of RHFL's key managerial personnel, had allegedly "orchestrated" a "fraudulent scheme" to siphon off funds from RHFL by disguising them as loans to entities linked to him.

Anil, while not directly approving the loans, influenced disbursement due to his role in the Reliance ADA Group, the order said.

It said RHFL officials, including Amit Bapna, Ravindra Sudhalkar, and Pinkesh Shah, played "critical roles" in the "improper" loan approval and management. As most borrowers failed to repay loans, RHFL defaulted on its debt obligations. This resulted in the company's resolution under the RBI framework, adding to the troubles of its public shareholders, the SEBI said.