Reliance Capital shares tank 12.5 pc as co to shut 2 lending arms

Shares of Reliance Capital on Monday came under massive selling pressure, plunging 12.5 percent after the company decided to shutter its two lending arms by December. The scrip plummeted 12.32 percent to close at Rs 24.55 on the BSE. During the day, it dropped 13.57 percent to Rs 24.20 -- its 52-week low.

On the NSE, it plunged 12.52 percent to close at Rs 24.45. 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 percent to its lower circuit limit of Rs 3.81 on the BSE during the day. It settled at 4.49 percent lower at Rs 3.83. "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 finalize the resolution plans which are expected to be completed by December," Anil Ambani told shareholders at the AGM in Mumbai.

This is the 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 defense 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 - the 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 12.28 percent, Reliance Power 8.71 percent and Reliance Nippon Life Asset Management 2.13 percent on the BSE.