Anil Ambani-owned Reliance Infra, Reliance Power clarify on SBI’s action against Reliance Communications’ loan account | Stock Market News

Anil Dhirubhai Ambani group (ADAG) stocks — Reliance Infrastructure and Reliance Power — issued a clarification of a similar nature to the exchanges that the action by the State Bank of India (SBI) on the Reliance Communications loan account is unlikely to have any impact on them.

Their statements came after India’s biggest bank, SBI, classified the loan account of insolvent Reliance Communications as fraudulent, citing alleged diversion of funds in a case dating back to 2016.

According to Indian banking laws, once an account is reported as a fraud, the matter is referred to enforcement agencies for criminal action, and the borrower is barred from securing further finance from banks and other institutions for at least five years.

Reliance Communications disclosed that its total debt stood at ₹40,400 crore ($4.71 billion) in March, according to a Reuters report. SBI’s letter also said it would report Anil Ambani, the director at Reliance Communications, to the Reserve Bank of India, in compliance with Indian banking regulations.

Ambani is pursuing the matter as legally advised, a spokesperson for Reliance Communications said on Wednesday.

Reliance Infra, Reliance Power clarify

Against this backdrop, both companies claimed that SBI’s action will have “absolutely no impact on business operations, financial performance, shareholders, employees, or any other stakeholders”.

Additionally, both companies claimed that they are separate and independent listed entities with no business or financial linkage to Reliance Communications. Further, they added that Anil Ambani is not on the Board of Reliance Infrastructure or Reliance Power.

Accordingly, any action taken in relation to Reliance Communications has no bearing or impact on the governance, management, or operations of Reliance Infra or Reliance Power.

ADAG stocks – share price trend

Both companies, however, remained under pressure during the entire day, with no signs of a rebound visible even after the clarifications by them.

Reliance Infrastructure share price ended at its 5% lower price band of ₹377.45 on the BSE. Meanwhile, Reliance Power stock closed at ₹65.51, down 3.66%. During the day, it hit a low of ₹64.75.

Despite the fall, both ADAG stocks remain on a firm footing, delivering multibagger gains in the past one year on the back of strong order wins and a turnaround in financial performance. Reliance Infra stock is up 104% over the year, while Reliance Power shares have gained 131%.

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