Why the rising prices of Anil Ambani stocks won’t last

Over the last year India’s richest man, Mukesh Ambani, has made headlines for some stellar business moves. Now, his younger brother Anil Ambani is also in the limelight – but for completely different reasons.

Companies led by Anil Ambani – who had last year told a British court that his net worth is zero – have piqued the interest of stock market investors leading to unrealistic rallies in their share prices.

Since the start of this year, the shares of Anil Dhirubhai Ambani Group-owned Reliance Power and Reliance Capital have risen by around 350% each, while the price of Reliance Infrastructure scrip has gone up by nearly 250%.

Anil Ambani’s struggles

In 2010, Anil Ambani was the sixth richest man in India. But his fortunes began to decline in 2011 following corruption charges.

In 2011, Reliance Communications faced charges of dubious transactions in 2G spectrum allocation. Following the scam, Reliance Communication’s allocated spectrum was cancelled. Anil and his wife denied any wrongdoing and said that they were not aware of the decision-making process by the company’s management. In 2018, the Central Bureau of Investigation gave him a clean chit in the matter.

But whatever was left of Anil’s fortunes in the telecom space was ruined when his elder brother entered the industry with Reliance Jio in 2016, which led to brutal competition in space.

Meanwhile, the…

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