Reliance Power shares fall 8% in 2 days after SEBI restriction

Shares of Anil Ambani-owned Reliance Power fell 9% in the last three trading sessions after Sebi banned the industrialist from the stock market for five years on allegations of siphoning off funds from Reliance Home Finance.

The stock plunged 5% to hit a day’s low of Rs 32.73 on BSE on Monday.

The 222-page order by the market regulator found that key executives of Reliance Home Finance (RFHL), including Anil Ambani, siphoned off money from the listed company (RHFL) by structuring it as ‘loans’ to extend credit to unworthy revolving borrowers, who then extended credit to revolving borrowers. These borrowers all turned out to be ‘promoter-linked entities’.

However, the company on Sunday said in a filing with the stock exchanges that Anil Ambani has resigned from the board of Reliance Power and that SEBI’s decision has no impact on the company’s operations.

“Reliance Power Ltd. was neither a notifier nor a party to the proceedings before SEBI in which the Order was passed. No directions are given in the Order against Reliance Power Ltd. Mr. Anil Ambani had resigned from the board of directors of Reliance Power Ltd. pursuant to the interim order dated February 11, 2022 passed by SEBI in the same proceedings. “Therefore, the order dated August 22, 2024 passed by SEBI does not have any bearing on the business and affairs of Reliance Power Ltd,” the company said in a filing. Besides barring Ambani and 26 other entities, including former key executives of Reliance Home Finance, from the securities market for five years, Sebi has imposed a penalty of Rs 25 crore on Ambani. The industrialist, who was declared bankrupt in a British court in February 2020, has also been banned from being associated with the securities market, including as a director or Key Managerial Personnel (KMP) in a listed company, or an intermediary registered with the market regulator, for a period of five years.Also read: RBI buys back SGBs: Should you call for tenders?

Moreover, the regulator has barred Reliance Home Finance from the securities market for six months and imposed a fine of Rs 600,000.

Sebi noted that Ambani could be seen as the main organiser of the scheme as the money was channelled to entities directly or indirectly linked to him or the ADA group.

According to a report by Mint, the stock price recently rose nearly 21% in four sessions after talks were underway with Adani Power to acquire its 600 MW Butibori Thermal Plant.

According to the report, Adani Power is in talks with Vidarbha Industries Power, a division of Reliance Power, for the acquisition, which is expected to be worth between Rs 2,400 crore and Rs 3,000 crore, which translates to around Rs 4 crore to Rs 5 crore per MW.

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