RCap shares tank nearly 14 pc as co shuts lending arms

Shares of Reliance Capital on Monday came under massive selling pressure, plunging nearly 14 per cent, after the company decided to shutter its two lending arms by December.

The scrip tumbled 13.57 per cent to touch its 52-week low at Rs 24.20 on the BSE.

On the NSE, the scrip cracked 13.59 per cent to a one-year-low of Rs 24.15.

Reliance Capital has two credit verticals -- Reliance Commercial Finance and Reliance Home Finance -- with a cumulative asset of over Rs 25,000 crore.

Shares of Reliance Home Finance dropped 5 per cent to its lower circuit limit of Rs 3.81 on the BSE.

"As part of the business transformation, Reliance Capital has decided to exit the lending business. Both our lending businesses - Reliance Commercial Finance and Reliance Home Finance -- are working closely with all our lenders and other stakeholders to finalise the resolution plans which are expected to be completed by December," Anil Ambani told shareholders at the AGM in Mumbai.

This is second major business that the Anil Ambani-led group is exiting after its once flagship Reliance Communication was shuttered two years ago and is now under the bankruptcy process. Its defence business -- Reliance Naval -- is also under severe financial stress.

Ambani blamed the crisis and the resultant decision to exit to the severe collateral damages the group had taken due to a combination of factors - crisis in the financial services sector, irrational action by auditors and rating agencies and now the slowdown of the economy.

Other group shares also faced selling, with Reliance Infrastructure plunging 10.63, Reliance Power trading 6.22 per cent lower and Reliance Nippon Life Asset Management 2.32 per cent during the afternoon trade on the BSE.