Reliance Infrastructure shares witnessed a sharp rise of over 11% on June 4 after a major relief from the National Company Law Appellate Tribunal (NCLAT). The appellate body stayed the insolvency proceedings against the company till July 18, which is the next date of hearing.
Relief After NCLT’s Admission of Insolvency Petition
The development came as NCLAT was hearing an appeal against the earlier order passed by the National Company Law Tribunal (NCLT) Mumbai, which had admitted the insolvency plea filed by IDBI Trusteeship Services Ltd.
The case goes back to April 2022, when IDBI Trusteeship filed a petition to initiate a corporate insolvency resolution process (CIRP) against Reliance Infrastructure. The petition alleged a default of ₹88.68 crore (as of August 28, 2018), which also included interest dues.
Basis of the Default Claim
The default related to ten invoices raised between 2017 and 2018 by Dhursar Solar Power Private Ltd (DSPPL), for the supply of solar energy to Reliance Infrastructure. IDBI Trusteeship, acting as the security trustee on behalf of DSPPL, filed the case after non-receipt of the payment for these invoices.
Reliance Infra’s Stand: Payment Already Made
Reliance Infrastructure countered the claim, stating that the entire amount of ₹92.68 crore had already been paid to Dhursar Solar Power. Based on this, the company argued that the insolvency petition should be rendered infructuous, as the dues were settled.
Following this, Reliance Infra moved NCLAT seeking relief and challenging the NCLT’s order.
Market Reacts Positively
The market responded quickly to the positive news. Reliance Infrastructure’s stock closed at ₹380 on NSE, recording an 11% intraday jump. Investors viewed the NCLAT’s stay as a significant breather for the company.
What Lies Ahead?
The next hearing is scheduled for July 18, and the final decision could determine the course of the insolvency proceedings. For now, the stay has eased immediate pressure on Reliance Infrastructure, allowing it more time to present its case and avoid being dragged into unnecessary insolvency proceedings.
