The Hindu Business Line : ADAG stocks hit new lows

Kolkata, June 30 Some of Anil Dhirubhai Ambani Group stocks, which usually fetched a relatively higher price-earning ratios, hit their 52-week lows on Monday.

Reliance Power, which made its debut early this year, touched its lowest point at Rs 135.20 before closing at Rs 136.80.

Reliance Capital, another group stock, slipped to its year-low of Rs 893.20 and finished at Rs 902.65. According to insider information available with the Bombay Stock Exchange, Morgan Stanley Mauritius Co Ltd & PAC have offloaded seven lakh shares or 0.26 per cent in the company on June 23.

Reliance Communications and Adlabs Films were not very far off from their troughs. Reliance Infrastructure (formerly Reliance Energy) and Reliance Natural Resources have shed values of late with substantial volumes.

Reliance Power special bonus issue and Reliance Infrastructures’ share buyback plan did not have much of an impact on their market price depreciation.

The overhang of open family spat on the proposed merger deal between Reliance Communications and MTN of South Africa has also been unfavourable for the sentiment of the group’s stocks.

Market participants, who are closely following the developments, are apprehensive of a smooth sail of the deal after the expiry of stated negotiation period.

According to Mr Arun Kejriwal of KRIS, generally ADAG group stocks ran ahead of their fundamentals. “Around the time of Reliance Power IPO, all other group stocks had also spurted to unsustainable levels on euphoria. Now, at a time when an overall pessimism has clouded the market, sharp declines in premia are in order,” he added.

According to Mr Ajay Jaiswal, President Research of Microsec, in this falling market all the high-PE stocks are being subjected to sell-offs as the market mood is not for aggressive growth discounting. An additional drag for ADAG group stocks is that all are knit together by crossholdings. Such a set of stocks tends to move together in tandem in a unidirectional fashion. In the last one month, the group stocks have declined within a range between 23 and 42 per cent.

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