ADAG stocks plunge on Sebi order

Despite Anil Ambanis clarification on Sunday that his group firms settled the Sebi probe voluntarily and his claim that the regulator has not imposed any ban on its own from participation in the capital market,the group stocks declined sharply on the stock exchanges on Monday.

Despite Anil Ambanis clarification on Sunday that his group firms settled the Sebi probe voluntarily and his claim that the regulator has not imposed any ban on its own from participation in the capital market,the group stocks declined sharply on the stock exchanges on Monday.

On the first day of trading after Reliance Infrastructure and RNRL agreed to abstain,as per a regulatory settlement with Sebi,from investing in listed stocks till the next year,shares of R-Infra plummeted by 7.84 per cent to close at Rs 735.70 on the Bombay Stock Exchange,becoming the worst performer on the 30-share benchmark. The scrip during the day had hit a year-low of Rs 714. Similarly,R-Power with whom RNRL has now merged,fell by 6.13 per cent to settle at Rs 137.90.

Among other group companies,Reliance Capital declined by 6.45 per cent while RCom was down 4.77 per cent. Reliance MediaWorks witnessed a slide of 8.45 per cent on the BSE. This fall was expected. Though the Sebi order wont impact the companies,bears took advantage of the situation. The settlement charge of Rs 50 crore was considered high. Besides,the sentiment was hit by the decision of companies and some directors to keep away from the market for a specific period, said BSE dealer Pawan Dharnidharka.

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Said Amar Ambani,Head of Research,IIFL,The third week of January began on a lacklustre note. After starting on a flat note,key indices turned volatile and were seen struggling for direction for most part of the day. ADAG stocks were under immense pressure … stocks like Reliance Power,Reliance Capital,Reliance Comm,Reliance Infra and Reliance Medi works fell sharply.

According to a dealer,the selling in ADAG stocks was overdone. The selling seems to be knee-jerk reaction from the market. Its not based on fundamentals. Why should other ADAG companies not related to the case go down? asked a dealer.