Reliance Group m-cap touches record low

Shares of Anil Ambani controlled companies were the top laggards in the mid- and small-cap indices on Monday after group firm Reliance Power posted a loss of Rs 3,559 crore for the fourth quarter. The fall in these stocks led to the group’s market cap plunging to an all-time low of Rs 20,592 crore.

Reliance Infra, Reliance Capital, Reliance Power and Reliance Home slumped 7-14 per cent. Reliance Nippon fell 1.5 per cent. Reliance Infra was the top laggard on the BSE MidCap index, ending down 13.2 per cent at 64.2. Shares of Reliance Naval, Reliance Power and Reliance Infra hit record lows intraday.

The group’s market cap has fallen 41 per cent from Rs 38,912.06 crore on December 31, 2018. At its peak, the market cap of the group stood at Rs 3.45 lakh crore in January 2008.

Reliance Power posted the loss after initially delaying the release of the result from June 7. Reliance Infra, which was scheduled to declare its results on June 7, has deferred it to June 14. The announcement was deferred for the second time. Initially, Reliance Infra's result was due on May 30.

Market experts said retail investors should stay away from these stocks given the negative sentiments surrounding the debt-laden group.

“The only major company with systematic risk was RCom and that has gone to NCLT for bankruptcy process. The other group companies don’t pose a systemic risk to the market. No major institutional investors are there in the stock but retail investors continue to trade in such beatenup stocks and end up losing money," said independent market expert Sandip Sabharwal.

All ADAG stocks have seen retail investor interest rising over the last few quarters. For example, retail investor holding in Reliance Communications as a percentage of overall shareholding rose from 21.4 per cent in the September quarter to 37.15 per cent in the March quarter, according to data compiled by ETIG Database. Retail holding as percentage of overall shareholding rose to 20.94 per cent in Reliance Power at the end of March quarter from 12.6 per cent at the end of September quarter. Reliance Naval, Reliance Capital, Reliance Infra, Reliance Home Fin and Reliance Nippon have also seen increase in retail holding. “Stocks like these continue to have volumes as traders are always looking for an opportunity to make a quick buck. A long-term investor should ignore these stocks," said independent market expert Ambareesh Baliga.