Mumbai’s markets once revered Anil Ambani as he led India’s rapid economic rise in the early 2000s. However, over the past decade, his empire has crumbled, with Reliance Home Finance becoming the latest casualty.
This penny stock’s plunge encapsulates the stunning reversal of fortunes for Ambani and his wider business group.
A Striking Collapse for Ambani’s Business Realm
Anil Ambani was the world’s 6th richest man in 2008 with a net worth of $42 billion. He seemed to possess the Midas touch, with interests spanning across telecoms, infrastructure, energy and financial services.
His flagship Reliance Communications was India’s second-largest telecoms company at one point.
However, the tide started turning through a mix of excessive debt exposures across the group and intensifying competition.
Reliance Communications plunged into heavy losses and eventually filed for bankruptcy last year, crushed under a mountainous $7 billion debt pile.
Meanwhile, Reliance Power posted record losses, and Reliance Capital was forced to sell its business assets to avoid insolvency.
Reliance Home Finance, which provides housing loans and financing for affordable housing projects, was the last remaining major company under Anil Ambani’s stable.
But even this collapsed in spectacular fashion. The housing lender defaulted on multiple debt obligations over the past year and is now under administration.
Shareholding Structure Highlights Wipeout of Promoter Wealth
Reliance Home Finance’s shareholding pattern for the December 2023 quarter reveals the full extent of the value destruction.
- Promoter shareholding (Anil Ambani and family) has shrivelled to just 0.74%
- Public shareholding makes up 99.26% of the company
- Anil Ambani personally holds just 2,73,891 shares
This remaining sliver of shares translates to negligible value for the embattled tycoon, with the company’s share price languishing at ₹5.
Just six years ago in September 2017, Reliance Home Finance shares traded at ₹107 each. From those heights, the share has drop 95% to be rendered almost worthless.
Financials Underscore Bleak Position
Reliance Home Finance’s latest quarterly results continue to highlight the company’s precarious financial position.
- Net sales revenue has drop by 99.89% to just ₹0.16 crore
- Net losses amounting to ₹2.56 crore
- Negative EBITDA at -₹2.56 crore
With business fundamentals in terminal decline, Reliance Home Finance shares are firmly stuck within penny stock territory. The company’s short-term share price spikes cannot mask the long-running value erosion.
Once the jewel in the crown for Anil Ambani’s empire, Reliance Home Finance has met the same fate as his other companies – burnt to cinders under the weight of heavy debts. Its downfall marks the nadir for the tycoon’s fortunes.
From dominating India’s economic rise to financial wilderness, Anil Ambani’s story arc may come to define boom-and-bust capitalism. With his final major venture sinking as a penny stock, the collapse is now complete.