Why Anil Ambani-backed stock hit upper circuit for 5th day in a row?

Reliance Anil Dhirubhai Ambani (ADAG) company, Reliance Capital share price has been hitting upper circuit for the last five trade sessions. This Anil Ambani-backed stock, which is one of the Reliance ADAG company listed on Indian bourses is in news these days for take over by Torrent Group and Hinduja Global. So, the stock is in action as both the companies have bid for acquiring the NBFC backed by Anil Ambani, who is Chairman of the Reliance ADAG.

Reliance Capital auction details

However, the matter is in NCLT court as Torrent Group and Hinduja Global participated in the e-auction on 21st December for acquiring RCap, where the former topped the bid with an offer of ₹8,640 crore for the proposed takeover. But, two days later, Hinduja Global offered a revised bid to the tune of ₹9,000 crore. While hearing the case, NCLT has directed the Reliance Capital to restrain from accepting the fresh offer of Hinduja Global, giving relief to the Torrent Group. the NCLT is expected to hear the proceeding next week and take final decision in regard to whose bid Reliance Capital should accept.

Speaking on the reasons for continuous rally in Reliance Capital shares, Avinash Gorakshkar, Head of Research at Profitmart Securities said, "Market is abuzz about the Reliance Capital stock on new management taking hold of the company in new financial year as NCLT has fixed deadline of 31st March 2023 for the NBFC's resolution. So, whatever verdict comes out from the NCLT, market is expecting that the outcome would be beneficial for the NBFC's financials and corporate governance."

Advising stock investors to avoid taking any fresh position in the scrip, Saurabh Jain, Vice President — Research at SMC Global Securities said, "This is short term sentiment and from fundamental perspective, there is no change in the financials of the company. One should think of exiting the scrip in current rise and avoid taking any fresh position in the debt-ridden company." He said that clarity would come only when the NCLT verdict comes out and no body knows how long it would take for the NCLT to give its final verdict in the new twist.

Reliance Capital share price today opened upside and locked-in 5 per cent upper circuit within few minutes of market opening after climbing to its intraday high of ₹10.65 apiece on NSE. After hitting upper circuit today, the small-cap penny stock managed to hit upper circuit on all 5 sessions in new year 2023.

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