ADAG shares tank; Reliance Infra plunges 40% in 7 days ahead of Q4 results

Shares of Reliance-Anil Dhirubhai Ambani Group (ADAG) companies continued to reel under pressure on Friday, falling by up to 40 per cent in the past seven trading sessions on the back of negative newsflow.

Reliance Infrastructure (RInfra), Reliance Capital (RCap), Reliance Home Finance (RHFL), Reliance Power (RPower), Reliance Naval and Engineering, and Reliance Communications plunged between 21 to 40 per cent in the past seven trading days on the BSE. In comparison, the benchmark S&P BSE Sensex slipped 1 per cent during the same period.

On June 11, RCap and its subsidiary RHFL informed the stock exchanges that their auditor, Price Waterhouse & Co (PwC), had resigned citing lack of “satisfactory” response from them during its audit of the 2018-19 financial results. The auditor had noted certain observations and transactions as part of the ongoing audit, which it believed, could be significant to the financial statements if not resolved satisfactorily.

“The company had clearly stated that the same (legal proceedings) would be initiated only if so legally advised, that too if required to protect the interests of all stakeholders, and it is hard to see how PwC has taken exception to this approach," RCap and RHFL said in a clarification to exchanges.

RCap, the biggest loser from the ADAG pack, slipped 9 per cent to Rs 76.85 apeice in the intra-day deals on Friday. The stock has slipped 37 per cent in the past seven trading days. RHFL, too, skid 7 per cent to hit a new low of Rs 13.85 per share. The stock has plunged 36 per cent during the period.

Meanwhile, RInfra tanked 8 per cent to Rs 57.90 per share, falling 40 per cent since June 5, ahead of the board meeting on Friday to consider January-March quarter (Q4FY19) results. The company has deferred its fourth quarter results of the fiscal year 2018-19 twice, first on May 30 and second on June 7. However, the debt-laden company failed to meet the revised date and postponed it to June 14 due to delay of results announcement by another group company RPower.

“RPower has approved its financial statements on June 08, 2019, which will now get consolidated in our financial statements. The Audit Committee of our company has therefore sought time to review and incorporate the financials of RPower in our consolidated financial statements. In view of the above, the adjourned meeting of the board of directors of RInfra will now be held on Friday, June 14, 2019,” RInfra said in a regulatory filing on June 8.

RPower had reported a huge loss of Rs 3,559 crore for Q4FY19, due to impairment and higher finance costs. The company had posted a net profit of Rs 189 crore in the year-ago quarter. It reported Rs 4,170 crore as impairment loss, of which Rs 1,017 crore was reduced through withdrawal from its general reserves during the quarter.

Company Price on BSE in Rs % change
Name 31/12/2018 04/06/2019 Latest 7 days YTD
Reliance Infra. 315.75 97.00 57.80 -40.4 -81.7
Reliance Capital 229.65 120.95 76.85 -36.5 -66.5
Reliance Home 41.60 21.50 13.85 -35.6 -66.7
Rcom 14.39 1.97 1.47 -25.4 -89.8
Reliance Power 28.65 7.04 5.45 -22.6 -81.0
Reliance Naval 13.93 7.69 6.06 -21.2 -56.5


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