RIL’s weak Q3 earnings make Mukesh Ambani lose $5.2 billion in one day

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RIL’s weak Q3 earnings make Mukesh Ambani lose $5.2 billion in one day


MUMBAI: It was not a good Monday for Mukesh Ambani, the owner of India’s largest listed company Reliance Industries, as RIL stock tanked over 5 per cent leading to a notional loss of wealth worth close to $5.2 billion for the family.

The notional wealth lost by the Ambani family today was greater than the market capitalisation of several Nifty50 companies and was equivalent to losing $13 million per minute of today’s trade.

Today’s loss will likely push Ambani to the 12th place in the Bloomberg Billionaires’ Index, where his position was at No. 11 at the time of publishing. According to the index, Ambani’s wealth was at $79.2 billion prior to today’s stock price crash.

The chairman and managing director of the company, promoted by his father Dhirubhai Ambani, currently owns 50.54 per cent stake in RIL in his own capacity and through family-owned entities.

Investors and analysts expressed concerns over the weaker-than-expected operating performance of the company in the quarter ended December, while a change in format of earnings statement also drew worries over transparency.

“RIL’s operating performance across segments was weaker than our expectations in Q3. Debt reduction was lower as a significant portion of inflows from capital raise and cash profits was once again utilized in capex, working capital and repayment of creditors,” said brokerage firm Kotak Institutional Equities.

Analysts were not pleased by the company’s decision to not report several key metrics it has traditionally reported, such as gross refining margins and granular data about fiber-to-home business.

Brokerage firm Edelweiss Securities raised concerns over falling transparency in the company’s earnings, and highlighted that the contribution of the consumer-focused business was much lower than what optically appeared because of dilution of stake.

While Reliance Industries posted a better-than-expected consolidated net profit growth for the reported quarter, it was only because of negligible tax expenses and sharp rise in other income of the company.

In what is a reflection of the falling clout of the stock in the market, the company briefly lost its crown of having the largest market capitalisation in the listed space to Tata Consultancy Services during the session. The company ended the day with a narrow lead over TCS.

Brokerage firm Spark Capital said that it will retain its negative outlook on the stock as most of the positives have been factored in and near-term triggers for more gains remain limited. Upsides from stake sale in oil-to-chemical business or potential surprises from Jio’s platform initiatives are not built-in, the brokerage said.





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