The shares of Reliance Group of Companies (earlier known as Reliance Anil Dhirubhai Ambani Group) are soaring and most of them hitting circuit. This has definitely boosted the net worth of its promoter, Anil Ambani. The combined market cap of the companies controlled by him has increased by whopping 330 per cent in last three months. The current market cap of group companies is around Rs 10,000 crore up from Rs 3000 crore at the start of March 2021.
It is pale shadow of what his companies commanded market cap in year 2008, when he was the sixth richest person in the world according to Forbes, with a wealth of USD 42 billion. It was an era when he was credited with India’s largest IPO, that of Reliance Power, which in 2008 was subscribed in less than 60 seconds, the fastest in the history of Indian capital markets to date.
There is fall from the grace for his group in last twelve years, nevertheless, it is much better than year ago when promoter Anil Ambani, who in year 2020 told a British court that his net worth was zero.
What led to such a drastic fall of the group, which gained dubious distinction of one of the fastest destroyers of shareholder wealth in the last 100 years? The combined group market cap declined by 99 per cent from its zenith (Feb 2008) to nadir (March 2020). The more important question is that the current resurgence in the market cap of companies is for real or there are some operators trying to take advantage of euphoria in the market? Will the companies prove to be a Phoenix or current uptick is just flash in the pan? Most of it will depend upon how the promoter of the companies will handle the situation going ahead. Therefore, we will first explore the intention and grit of promoter himself and after that the business he is into.
This story is from the July 2021 edition of Indian Economy & Market.
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This story is from the July 2021 edition of Indian Economy & Market.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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