Lenders dumped shares of Anil Ambani group companies they held as the value of their collateral plummeted about 126 billion rupees ($1.8 billion) this month, adding to the litany of woes plaguing the Indian billionaire.

Creditors sold a total 5.5 billion shares in four companies —

Reliance Power Ltd., Reliance Infrastructure Ltd., Reliance Communications Ltd. and Reliance Capital Ltd. — leading to a 3-to-8 percentage-point
reduction in founders’ stakes in these firms, according to filings. The
sale is “illegal, motivated and wholly unjustified,” the group said in a statement.

The fragile investor sentiment for the Anil Ambani group was dealt another blow after its wireless unit, Reliance Communications, said last Friday it plans to file for
bankruptcy. The selloff spread to other group firms, eroding the value of the shares pledged as collateral. IDBI Trusteeship Services Ltd., which held Reliance Power shares,
said it sold the assets as the borrowers “defaulted on the terms.”

Reliance Communications has seen its market value drop by more than half this week, while shares of Reliance Power and Reliance Infrastructure have crashed almost 60 percent each. Reliance Capital has tumbled 34 percent. Friday’s rebound shouldn’t be seen as a “positive development,” said Rajnath Yadav, an analyst at Choice Equity Broking Pvt. in Mumbai.

“Investors must be highly cautious while investing in stocks of companies that have filed for bankruptcy,” he said. “They should stay away from such stocks.”

The share pledge problem has also engulfed other Indian companies. Media tycoon Subhash Chandra’s

Essel Group signed a pact with its lenders that protects the group’s borrowings against shares from being counted as default until Sept. 30, even if their value erodes. The accord followed the 27 percent slump in the flagship Zee Entertainment Enterprises on Jan. 25.

(Updates with analyst comment in fourth paragraph.)