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Reliance Infra shares dips as Supreme Court Overturns Ruling in DMRC Dispute

12 Apr 2024 , 03:09 PM

Reliance Industrial Infrastructure Ltd (RIIL), owned by Anil Ambani, experienced a 20% decline on April 12, hitting the lower circuit once again. This sharp fall came after the Supreme Court overturned its previous order, which upheld an arbitral award in favor of RIIL in a dispute with the Delhi Metro Rail Corporation (DMRC).

The Supreme Court, accepting DMRC’s curative petition, reversed its ruling on April 10, which had stated that DMRC owed approximately ₹8,000 Crore to Delhi Airport Metro Express Pvt Ltd (DAMEPL), a company under Reliance Infrastructure.

The bench, consisting of Chief Justice of India DY Chandrachud, Justices BR Gavai, and Surya Kant, directed Reliance Infra unit to refund the money deposited by DMRC.

The dispute began when DMRC failed to pay termination fees to DAMEPL after terminating a contract to operate the airport metro line in Delhi but continued using the project's assets and revenues since July 2013.

An arbitration panel ordered DMRC to pay ₹2782.33 Crore plus interest to DAMEPL, with the award being upheld by both the Delhi High Court and the Supreme Court initially. However, DMRC later challenged the 2021 Supreme Court order through a curative petition.

In response to the recent SC order, Reliance Infra issued a clarification stating that the Supreme Court allowed the Curative Petition filed by DMRC against DAMEPL, emphasizing that it imposes no liability on the company, and it hasn't received any money from DMRC/DAMEPL under the arbitral award.

Currently, Reliance Infra shares are trading at ₹198.90 on the National Stock Exchange (NSE), down nearly 12.98% from the previous close.

Over the last five sessions, the stock has incurred a loss of 30%. Both BSE and NSE have placed Reliance Infra's securities under the short-term Additional Surveillance Measure (ASM) framework, aiming to alert investors about potential high volatility in share prices.

So far this year, the Reliance Infrastructure stock has gained 8% compared to a 4% rise in the Nifty 50 index.

For feedback and suggestions, write to us at editorial@iifl.com

Related Tags

  • Business news
  • Company news
  • DMRC
  • Reliance Industrial Infrastructure Ltd
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