Shares of this infrastructure company clocked 20 percent lower circuit in Wednesday’s trading session after the Supreme Court ordered one of its subsidiary companies to refund Rs 8,000 crores paid by DMRC.
With a market capitalization of Rs. 9,008 crores, the shares of Reliance Infrastructure Ltd started Wednesday’s trading session on a higher note at Rs. 286.65 compared to its previous close of Rs. 284.50. During the trading session, the shares clocked 20 percent lower circuit at Rs. 227.60 apiece.
According to reports, the Supreme Court has granted permission for a curative petition submitted by the Delhi Metro Rail Corporation (DMRC), instructing Reliance Infrastructure to reimburse the Rs. 8,000 crores previously paid to its subsidiary, Delhi Airport Metro Express Private Limited (DAMEPL). DMRC initiated the curative petition contesting the arbitral award mandating payment to the Reliance Infrastructure subsidiary.
The matter concerns a contract established in 2008 between Reliance Infrastructure and DMRC for the Delhi Airport Express under a build-operate-transfer (BOT) framework. Reliance Infrastructure terminated the contract in 2012, prompting DMRC to invoke an arbitration clause. In 2017, the arbitral tribunal ruled in favour of the Reliance Infrastructure subsidiary, directing DMRC to pay Rs 2,800 crores plus interest.
The apex court has ordered Delhi Airport Metro Express Private Limited (a subsidiary of Reliance Infrastructure) to refund the amount received from the DMRC and stated that the court made an error of judgement in interfering with the division bench order, causing a grave miscarriage of justice.
DMRC lodged a curative petition challenging a two-judge bench ruling of the Supreme Court that affirmed the legitimacy of the arbitral award in favour of DAMEPL. However, a division bench of the Delhi High Court had previously nullified this award.
Coming onto the company’s financial statements, the revenue decreased by 35 percent from Rs. 7,171 crores during the September quarter to Rs. 4,657 crores in the December quarter. On the other hand, the company’s net losses increased from Rs. 182 crores to Rs. 301 crores over the same period.
Reliance Infrastructure Ltd. is engaged in developing infrastructure projects through various Special Purpose Vehicles (SPVs) in several sectors such as power, roads, metro rail and airports in the infrastructure space and the defence sector.
Written By Vaibhav Patil
Discliamer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
