Why Anil Ambani’s ADAG group stocks are rising — explained – Mint

Speaking on the reason for rise in Anil Ambani’s ADAG group shares Asutosh Mishra, Head of Research – Institutional Equity at Ashika Stock Broking said, “Many firms under the NCLT resolution of Anil Ambani are going to vote and make financial decisions in the next few weeks. Initial trends indicate that overall recovery will be much higher than the amount due to creditors, and thus there is value left for the existing shareholders. This is resulting in renewed interest in ADAG group shares.”

However, Asutosh Mishra went on to add that the final outcome of their resolution is still not clear, and hence some of these moves can be purely speculative.

Commenting upon the Reliance Infra share price rally; Sandeep Matta, Founder at TRADEIT Investment Advisor said, “The stock has given stellar returns in past 2 months and management seems geared up to improve fundamentals. The ADAG group company has significantly reduced the debt in past few years and recently Reliance Infra board has approved raising funds of ₹550 crore from promoters and VFSI to be utilized for long-term resources for general corporate purposes. The fund raised will be used to fund future growth and also to reduce debt.”

On his suggestion to the share market investors and traders in regard to Reliance Infra shares Sandeep Matta added, “Technically, the stock is in overbought zone and a sizeable correction is expected in short-term. Existing investors can hold for the target of ₹110-120 in a year with the stop loss of 55 while new accumulation can be initiated at ₹68-65 level. However, we do not recommend over investment in this counter and advise investors to keep booking profits in a phase wise manner.”

Speaking on Reliance Capital share price rally; Sandeep Matta, Founder at TRADEIT Investment Advisor said, “Counter is hitting upper circuit on regular basis from past few days on account of its plan to reduce debt of over ₹9000 crore related to its 100 per cent subsidiary Reliance Commercial Finance. Despite 100 per cent gain in past one month, we recommend to avoid the counter as over 94 per cent of the holding is owned by public while promoters hold mere 1.5 per cent. With negative reserves, high debt, YoY negative EPS and continuous exit from DII are few basic reasons to stay away from this counter. Investors or traders who have entered from lower levels can book profit at least to the extent of capital deployed keep the balance to ride the rally with the stop loss of slightly above daily lower circuit.”

On the reason for Reliance Power share price rally and its outlook Sandep Matta of TRADEIT Investment Advisors said, “Like other ADAG group of companies, Reliance Power has also delivered over 100 per cent return in last one month and more than fundamental it’s a spill over impact of positive news in one company to another. Company is also planning to consider raising long term funds through equity or equity linked instruments. Reliance Power is also regularly hitting upper circuits and is currently in overbought zone. New investment at current pricing is not advisable and investors who are currently holding Reliance Power stocks are advised to book profit in phase-wsie manner.”

For information to the readers Anil Ambani’s ADAG has six listed companies that are Reliance Infra, Reliance Power, Reliance Capital, Reliance Naval, Reliance Communication and Reliance Home Finance. These stocks are expected to remain in focus this week as they have delivered stellar return in the last week.