Reliance Group wiped off about Rs 10,500 crore in investor wealth in five days as Anil Ambani-controlled Reliance Communications Ltd.'s decision to voluntary approach insolvency court left investors and creditors rattled.
Shares of the group companies tumbled through the week, eroding nearly a third of the group's market value. What aggravated the selloff is that creditors holding shares pledged by Ambani sold them in the open market as the value of the collateral fell below the agreed threshold.
Investors were already jittery as Reliance Communications deal sell its towers and airwaves to pare Rs 47,000 crore debt failed to receive the government's approval. It expected to raise Rs 25,000 crore by selling the assets to elder brother Mukesh Ambani's Reliance Jio Infocomm Ltd., and an additional Rs 10,000 crore by selling 125-acre real estate in Navi Mumbai.
As the group shares plunged, Reliance Power lost more than half of its market value.
Fall in group companies prompted creditors to sell pledged shares worth Rs 554 crore.
As of December, close to 57 percent shares owned by the promoter group were pledged.
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