Anil Ambani’s Reliance Infrastructure seeks review of once-a-week trading curb amid insolvency row

“Reliance Infrastructure has highlighted that the current framework, which permits trading only once a week within a narrow ±5% price band, results in price movements that are largely mechanical and predictable. The Company believes that such restrictions may not adequately reflect prevailing business fundamentals, operational performance or long-term value creation potential. Reliance Infrastructure shares are otherwise actively and widely traded in the market, reflecting sustained investor participation and liquidity,” the company wrote in a press note.

Trading of Reliance Infrastructure shares was restricted earlier this year in connection with the National Company Law Tribunal pursuing insolvency proceedings against the company. Stock exchange rules mandate that any company entering bankruptcy proceedings is placed automatically under a strict Additional Surveillance Measure framework to protect investors from extreme volatility.

What has Reliance Infrastructure said?

The company has sought a review of the Additional Surveillance Measure framework “to safeguard shareholder value and investor confidence”. It noted that the combination of once-a-week trading and the narrow price band produced “price movements that are mechanical and entirely predictable”.

An official communique also urged SEBI as well as NSE and NSE to “review the Insolvency and Bankruptcy Code-linked surveillance framework”, reconsider the trading curbs and “introduce appropriate safeguards to protect shareholders”.

“Reliance Infrastructure shares are otherwise actively and widely traded in the market, reflecting sustained investor participation and liquidity….the Company has further submitted that the impact of these restrictions falls disproportionately on its public shareholders. During lower-circuit phases, shareholders are often unable to exit their investments at a reasonable market price, while the value of their holdings erodes by a near-fixed percentage each week,” the company added.

As per an official release, Reliance Infrastructure has proposed a calibrated approach that retains key risk-mitigation measures, including gross settlement, 100% margin requirements, Additional Surveillance Deposit (ASD) and price-band safeguards, while enabling more effective price discovery. The Company has reportedly requested regulators to consider alternatives such as a periodic call-auction mechanism or a wider and graded price band to facilitate genuine two-sided trading.

Insolvency proceedings on hold

The National Company Law Tribunal had ordered insolvency proceedings against Reliance Infrastructure last year following a payment row. The National Company Law Appellate Tribunal put the order on hold days later as the company paid the disputed amount in full. The matter had remained in limbo until the stock exchanges automatically triggered insolvency-linked restrictions in April this year.

“The Company has highlighted that the ASM framework was triggered despite NCLAT staying both the insolvency admission order and the Corporate Insolvency Resolution Process against the company. Reliance Infrastructure has noted that no Resolution Professional has assumed control of the Company and that its affairs continue to be managed by its duly constituted Board of Directors in the normal course of business,” an official statement added.