ED Disrupts Anil Ambani Group’s Delicate Recovery Efforts
Anil Ambani’s business empire, once burdened by significant debt and defaults, is experiencing a fragile resurgence. Reliance Power and Reliance Infrastructure, two key companies within the Reliance Anil Dhirubhai Ambani Group (RAAG), have shown signs of recovery, with their stock prices rising over the past year. However, this positive momentum faced a setback when the Enforcement Directorate (ED) conducted raids on entities linked to the group, stirring up concerns about past financial issues.
Recent Developments in Reliance’s Financial Landscape
In July 2025, Reliance Power and Reliance Infrastructure received board approval to raise a combined total of Rs 18,000 crore through qualified institutional placements and non-convertible debentures. This move followed aggressive debt reduction strategies, with Reliance Infrastructure achieving zero standalone net debt and Reliance Power significantly repaying its bank loans. The financial turnaround has been reflected in their recent earnings reports, with Reliance Power reporting a profit of Rs 2,948 crore for FY25, a notable recovery from a loss of Rs 2,068 crore the previous year. Similarly, Reliance Infrastructure posted a profit of Rs 4,938 crore, reversing earlier losses.
Despite these positive developments, both companies have distanced themselves from Anil Ambani, emphasizing that the ongoing ED investigations pertain to Reliance Communications (RCOM) and Reliance Home Finance (RHFL), which are no longer part of the group. They clarified that Ambani does not hold any board positions in the current entities, aiming to reassure investors amid the scrutiny.
Legacy Issues and Investigations
The current investigations by the ED focus on legacy defaults associated with RCOM, which defaulted in 2017 after accumulating a staggering debt of Rs 43,000 crore. The company entered insolvency proceedings in 2019, leading to significant asset erosion and procedural delays that resulted in only a 35% recovery for creditors. Following RCOM’s troubles, Reliance Naval also faced severe financial challenges, forcing lenders to accept an 83% haircut on their loans. In 2019, RHFL and Reliance Capital were downgraded to default status, marking a tumultuous period for the group.
The ED is examining allegations of quid pro quo between RHFL and Yes Bank, suggesting that funds from RHFL were funneled to entities linked to the bank’s promoters prior to loan approvals. The promoters assert that they adhered to due process and were repaid. A Supreme Court ruling in 2023 facilitated the acquisition of RHFL by Authum Finance, completing its resolution process. Notably, RCOM and RHFL are no longer affiliated with RAAG, as the group has undergone significant restructuring.
Market Reactions and Future Outlook
The revival of Reliance Power and Reliance Infrastructure has not gone unnoticed, especially as much of the group’s past remains entangled in legal disputes and financial write-downs. The recent enforcement actions by the ED may challenge the market’s perception of the new entities versus the old legacy issues. Investors are now left to ponder whether the current positive trajectory of Reliance’s core businesses can withstand the scrutiny of past financial mismanagement.
As Reliance Infra and Reliance Power continue their recovery, the market’s response will be crucial in determining the future stability of these companies. The ongoing investigations and their implications for investor confidence will play a significant role in shaping the narrative surrounding Anil Ambani’s business empire. The ability of these companies to separate themselves from their troubled past will be tested in the coming months, as they strive to maintain their momentum in a competitive market.
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