Reliance's market cap sheds $16 Bn on profit drop; Mukesh Ambani's net worth down ~$6 Bn

After Mukesh Ambani's Reliance Industries Ltd on Friday reported a 15% drop in second-quarter net profit after the pandemic-hit oil demand dragged down continued good showing in consumer-facing businesses such as telecom, Asia's richest man lost in the region of $6 billion from his net worth as Reliance's shares tumbled the most in over seven months following in the markets on Monday.

Reliance's market valuation drops

The stock tumbled 8.62% to close at Rs 1,877.30 on the Bombay Stock Exchange (BSE). During the day, it tanked 9.46% to Rs 1,860. On the NSE, it declined by 8.61% to close at Rs 1,877.45. The company's market valuation also fell by Rs 1,19,721.68 crore to Rs 12,69,437.32 crore on the BSE.

Reliance's earnings announcement came after the market closed on Friday. Net profit was attributable to owners at Rs 9,567 crore in July-September compared with Rs 11,262 crore a year back, Reliance said in a stock exchange filing. The oil-to-telecom-to-retail conglomerate saw consumer-facing units doing well amid the lockdown easing but the core business continued to face pressure.

The conglomerate's net addition of 7.3 million subscribers and per-user revenue rising to Rs 145 helped the telecom business soar. Digital services, which include the telecom arm Jio, saw pre-tax profit surge 53% to Rs 8,345 crore as revenues soared by more than one-third.

'Strong overall operational & financial performance'

"We delivered strong overall operational and financial performance compared to the previous quarter with recovery in petrochemicals and retail segment and sustained growth in the Digital Services business," said Mukesh Ambani, Chairman and Managing Director, RIL.

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"Domestic demand has sharply recovered across our O2C business and is now near the pre-COVID level for most products. Retail business activity has normalised with strong growth in key consumption baskets as lockdowns ease across the country. With large capital raise in the last six months across Jio and retail business, we have welcomed several strategic and financial investors into Reliance family. We continue to pursue growth initiatives in each of our businesses with a focus on the India opportunity," he added.

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(With PTI inputs)