Liquidity woes make Reliance Capital risk-reward unfavourable for investors

Even if the situation could change for good, for investors, it raises questions whether RCap's non-banking businesses are the early victims of the liquidity squeeze post the IL&FS defaults

With the Anil Ambani or ADA group’s debt piling up with every passing quarter, its flagship company Reliance Capital (RCap), too, has been under significant pressure. Over the past year, the RCap stock has seen a 66 per cent erosion in its market value. What’s worse is that market experts say that adverse developments over the last weekend involving two key subsidiaries —Reliance Home Finance and Reliance Commercial Finance — could lead to the RCap stock opening trade on a weak note on Tuesday.

Explaining the genesis of the problem, Amit Bapna, CFO, Reliance Capital, says the delay in conclusion