Recently, Anil Ambani stocks have seen an amazing rally. Stocks have jumped more than 200% in just 2-3 months. After this massive rise, if you are considering to make some investment in them, then make sure you know these things. . . . .
Why Anil Ambani Group Shares are rising?
Promoters (Anil Ambani Family) are going to invest ₹400 crores in Reliance (NS: RELI ) Infra and further Reliance Infra is going to take ₹1300-1400 crore worth of Equity shares in Reliance Power (NS: RPOL ).
After this investment, ownership of Promoters is expected to rise by 20-40% in both Reliance Infra and Reliance Power. This investment indicates that Promoters (Anil Ambani family) are willing to increase their stake in their companies. Therefore, Operators in Anil Ambani led Reliance Group shares have again turned active after a long time.
They are purchasing shares at every price. And that's why share prices are suddenly rising. If Promoters wouldn't be willing to increase their stake in their companies, operators wouldn't have turned active in them.
In our article 15 Best Penny Stocks to Buy now in India! , we had mentioned Reliance Power as one of the best Penny stocks to buy when it was trading around Rs 5. We mentioned it because a huge rally in Reliance Power shares was expected. And that has come now.
Now, Promoters (Anil Ambani Family) might be trying to increase stakes in their companies because
- The future is bright for the companies which mean companies are going to see an increase in Earnings from here.
- Promoters have got enough money from some source to easily increase their stake in their companies.
- Or there were some other issues with Promoters that are now close to resolution or have already resolved.
In the last 2–3 months, no major change in the businesses of Anil Ambani companies has taken place. So, the willingness of Promoters to increase their stake in companies through the acquisition of shares from the open market, allotment of new shares to them, seems to be the main reasons behind why Anil Ambani led Reliance Group shares are rising.
Will Anil Ambani led Group shares to continue to rise?
This thing completely depends on the Operators and Future plans of the Promoter Family. If Promoter Family continued to increase their stake in their companies through all possible means and Operators kept purchasing shares from Exchanges, then Anil Ambani shares might see more rise from here. Otherwise, they can either see a good decline or might stop going up further from here.
Earlier, Anil Ambani Shares were primarily down and available around penny prices because most of the Promoter holdings that were pledged had been sold by Lenders in Open Market (on Exchanges). Selling quantity by Lenders was so huge that no one was able to absorb them. And therefore, shares of Anil Ambani companies came down heavily and were trading with very low prices.
Financial Strain in Businesses was another cause for Low prices of Anil Ambani shares. Therefore, the business performance of Anil Ambani companies has not been good. Also, due to high Financial Strain in some businesses, Anil Ambani Family has already lost control over few businesses.
Which Companies are Still Under Control of Anil Ambani Family?
There are 6 listed stocks that are attached to Anil Ambani. But out of them, only 3 are under the Full control of Anil Ambani. These 3 companies or stocks are
The other 3 stocks are not a part of Anil Ambani Group. These 3 stocks are
- Reliance Naval and Engineering Ltd (NS: RELV )
- Reliance Communications Ltd (NS: RLCM ) (Rcom)
- Reliance Home Finance Ltd (NS: RLIC )
Reliance Naval and Reliance Communication have become bankrupt in past and currently going through Insolvency and Bankruptcy proceedings under NCLT. Lenders are trying to find a new Buyer for them. These companies are no longer a part of Anil Ambani Group.
When the lenders would get succeeded in finding a buyer for these companies, there is no surety whether the existing shareholders would get anything or not and whether the shares would continue to be listed on the exchanges or not. Shares can be delisted also by these companies.
Reliance Home Finance is not under NCLT for Bankruptcy proceedings but it is still not in Full control of Anil Ambani Group and lenders of this company are trying to sell it. Because it is out of NCLT, there are fewer risks in Reliance Home Finance.
Risks are higher in those stocks where bankruptcy proceedings are going through the NCLT route and banks are not expected to recover a major part of the money.
As of now, Reliance Home Finance is also not a part of Anil Ambani Group. If Anil Ambani can clear all pending dues of Reliance Home Finance, then only it will become a part of Anil Ambani again. Otherwise, lenders have almost finalised to sell this company to Authum Investment and Infrastructure (new Buyer).
Many Investors are mistakenly buying these 3 companies (Reliance Home Finance, Reliance communication, Reliance Naval) just because they have the Reliance name attached to them and are rising with other Anil Ambani companies.
They have the name of Reliance attached with them just because they were earlier the part of Anil Ambani. They are no longer controlled by Anil Ambani Family.
This information is solely to let you know about which Stocks are still a part of Anil Ambani Group and why these Stocks are rising.
Buying non-Anil Ambani companies just because they are also rising could be very risky. So, take any trade-in Anil Ambani companies accordingly.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.