Reliance Infrastructure Challenges Surveillance Framework Citing Impact on 7 Lakh Retail Shareholders

Reliance Infrastructure Challenges Surveillance Framework Citing Impact on 7 Lakh Retail Shareholders​

Reliance Infrastructure Limited has requested a review of the Insolvency and Bankruptcy Code (IBC)-linked surveillance framework, specifically focusing on Additional Surveillance Measures (ASM) and associated trading restrictions that are currently in place for its shares. The company argues that these measures adversely affect shareholder value and investor confidence among its base of more than 7 lakh retail public shareholders.

The representation submitted by Reliance Infrastructure highlights the adverse effects of the current regime, which mandates trading only once a week within a narrow ±5% price band. The Company asserts that this framework results in price movements that are largely mechanical and predictable, failing to adequately reflect the company's underlying business fundamentals, operational performance, or long-term value creation potential.

Reliance Infrastructure notes that its shares remain actively and widely traded, indicating sustained investor participation and liquidity in the market. However, the company maintains that continuing such artificial trading restrictions is counterproductive to the interests of retail and small public shareholders. The representation further stated that these restrictions disproportionately affect public shareholders, as they often face difficulty exiting their investments at a reasonable market price during lower-circuit phases, leading to near-fixed percentage value erosion each week.

In seeking balanced regulatory safeguards, Reliance Infrastructure urged regulators to reconsider the once-a-week trading restriction and introduce suitable protections for investors. The company proposed a calibrated approach that would retain necessary risk mitigation elements—including gross settlement, 100% margin requirements, Additional Surveillance Deposit (ASD), and price band safeguards—while allowing for more effective price discovery. Alternatives put forth included implementing a periodic call-auction mechanism or establishing a wider, graded price band to facilitate genuine two-sided trading.

The Company also highlighted that the ASM framework was triggered despite the National Company Law Appellate Tribunal (NCLAT) having stayed both the insolvency admission order and the Corporate Insolvency Resolution Process (CIRP) against Reliance Infrastructure. The company confirmed that no Resolution Professional has taken control, and its affairs continue to be managed by its duly constituted Board of Directors in the normal course of business.

Reliance Infrastructure Limited operates as one of India's largest infrastructure entities, developing projects through various Special Purpose Vehicles (SPVs). Its portfolio covers high growth sectors such as Power, Roads, Metro Rail, and Defence. The company is a major provider of Engineering and Construction (E&C) services for power, metro, and road projects, including road projects on a Build, Operate, and Transfer (BOT) basis and a metro rail project in Mumbai on a Build, Own, Operate and Transfer (BOOT) basis. Reliance Infrastructure also serves as a leading utility company with a presence in power distribution.

RELINFRA Stock Price Movement​

On Friday, Reliance Infrastructure Limited shares surged, settling at ₹81.76 after gaining 5.00% from previous closing levels. The stock saw robust activity, with over 1.6 million shares traded during the session.