Mukesh Ambani, Asia’s richest man, has lost nearly 7 billion dollars from his net worth after Reliance Industries Ltd’s stock plunged the most in seven months on falling quarterly profits.
On Monday, Shares of India’s most valuable company closed 8.6% lower in Mumbai, the lowest since March 23. The benchmark S&P BSE Sensex was the worst performer of the day, rising 0.4 percent. According to the Bloomberg Billionaire Index, the slide also puts Mr. Ambani’s fortune at about 71 billion dollars.
As the coronavirus pandemic hit fuel demand, The refining-to-retail company reported a 15 percent drop in quarterly profit late Friday to 9,570 crores. Revenue fell 24 percent to ₹ 1.16 lakh crore.
Reliance’s oil refining unit has faced a dip in demand for transport fuel, forcing Covid-19 people to stay at home. The organization is in the midst of a transformation under the leadership of 63-year-old Mr. Ambani, as it looks to transform the oil and petrochemicals giant into a technology and digital services company by strengthening its telecom and e-commerce businesses.
The decline in earnings supports Mr. Ambani’s strategy and highlights Reliance’s growing need to reduce its dependence on the energy sector and boost the business that benefits India’s billions of customers.
Profit to improve crude oil barrels in fuel or Reliance’s gross refining margin has fallen to $5.7 per barrel in recent quarters. Which was $ 9.4 a year earlier the company said. Meanwhile, profits in its telecom business under Reliance Jio Infocomm Ltd. have nearly tripled in the same period.
Shares of Reliance have risen about 25 percent this year, while the Sensex has fallen 3 percent as investors boosted Mr. Ambani’s fund-raising stance, saying Reliance would raise more than 25 billion dollars by selling its stake in digital and retail units. According to the Bloomberg Billionaire Index, Mr. Ambani earned $19.1 billion in 2020 through Friday, while he was the sixth richest man in the world.
“The stock is correcting a part of its sharp gains registered over the last few months,” said Arun Kejriwal, founder of KRIS, a Mumbai-based investment advisory firm. “Now, the market is booking its profits.”