Ambani loses $2.6bn, drops 4 places on Bloomberg rich list after AGM

Reliance Industries Chairman Mukesh Ambani lost $2.6 billion in wealth and dropped down 4 places to the 10th spot on Bloomberg Billionaires Index after the Annual General

Meeting. Reliance shares closed 3.7% lower on Wednesday after Ambani said the company's plans to sell 20% stake in its oil-to-chemical business to Aramco is delayed. The $15-billion deal was announced last year.

Detailed Report

• During the Reliance Annual General Meeting, the stocks of the company fell by over 6%, making Ambani lose over $2.5 billion in wealth.
• Ambani with a total wealth of $69 billion, has fallen behind Warren Buffet, Larry Page, Elon Musk, Sergey Brin all of whom he had beaten just in the last few days.
• During the AGM, Ambani also spoke about the delay in the deal with Saudi Aramco, which could have triggered the fall in stocks.

    Reliance Chairman Mukesh Ambani was having a dream run at the stock market which resulted in him rising fast to the sixth rank in the Bloomberg Billionaires Index. But during the Reliance Annual General Meeting, the stocks of the company fell by over 6%, making Ambani lose over $2.5 billion in wealth, dropping down four places to the 10th spot in the billionaires list.

    Ambani with a total wealth of $69 billion, has fallen behind Warren Buffet, Larry Page, Elon Musk, Sergey Brin all of whom he had beaten just in the last few days.

    Reliance Industries stocks were trading at ₹1973.3 at 2 pm on Wednesday when the AGM began, but during the next one and half hours by the time markets closed, the stocks were down to ₹1842.35. On Thursday morning, Reliance share price stood at ₹1851.90.

    The fall in stocks came despite the fact that Reliance Jio got a $4.5 billion investment from Google, in the last of its investments for Jio Platforms.

    During the AGM, Ambani also spoke about the delay in the deal with Saudi Aramco, which could have triggered the fall in stocks. He said that while the Saudi Aramco deal for equity investment in the O2C business has not yet taken off as per the original timeline, Reliance values the two decade long relationship with Saudi Aramco and is very committed to a long term partnership.

    “One of the key reasons for the stock to correct post the AGM was the management's commentary that the Saudi Aramco deal has not progressed as per expectations and that the company will spin off their O2C business into a separate subsidiary. RIL and Saudi Aramco had signed a non-binding letter of intent in August 2019 wherein Saudi Aramco was looking at picking up a 20% stake in the O2C business at an enterprise value of $75 billion,” Jyoti Roy, DVP- Equity Strategist at Angel Broking told Business Today.

Other Analysis too agreed :

    “Deal with Saudi Aramco had not progressed as per the original schedule. Everyone was expecting a positive announcement on the deal progress. All other announcements are already known apart from google investment, plan to build affordable 4G smartphone and potential deployment of 5G services next year,” Abhijeet Bora, Senior Research Analyst at Sharekhan told Economic Times.

Source: Sanchita Dash, Business Insider