Indian financial services company Reliance Capital Ltd will exit the lending business, group Chairman Anil Ambani said on Monday, sending its shares to over two-decade low.
This comes as the non-banking financial company faced "collateral damage" due to a slowing economy and a lending crisis in the sector, Ambani said at the company's annual general meeting.
In June, auditors raised several red flags around the company's fourth-quarter results, including a lack of clarity in related party transactions and accounting methodology.
Reliance Capital currently lends to small and medium enterprises through unit Reliance Money and to home buyers via Reliance home finance. Both these businesses accounted for about 15% of the company's revenue last financial year.
Apart from lending, Reliance Capital has interests in asset management and general insurance businesses.
The company has been divesting assets this year. It reduced its stake in asset management arm Reliance Nippon Life Asset Management Ltd to just over 4% from about a quarter.
"It is unfortunate that during all this noise, the true value of our businesses has not been recognised," Ambani said.
Shares of Reliance Capital, which have lost about 99% of their value since hitting an all-time high in January 2008, slumped as much as 13.6% on Monday to their lowest since March 30, 1999 and were last down 9.5%.
