Reliance Infra Arm Faces Notices From Banks

Reliance Infrastructure Limited (Reliance Infra) announced that its wholly owned subsidiary, PS Toll Road Private Limited (PSTR), has been issued substitution notices by Axis Bank and IDFC First Bank. The notices, dated December 26, 2024, pertaining to alleged defaults in maintaining the Debt Service Reserve Account (DSRA) for the six-laning project on the Pune-Satara section of NH-44 in Maharashtra. The development raises concerns about the potential management changes in the project.

Lenders Invoke Substitution Rights Over Alleged DSRA Defaults

The notices sent by Axis Bank and IDFC First Bank invoke the “right of substitution” clause under the Concession Agreement for the NH-44 toll project. This clause enables lenders to take control of the project if the borrower fails to meet specific financial obligations, such as maintaining the DSRA. The DSRA is a crucial account designed to ensure debt repayment. The lenders claim PSTR has failed to comply with the terms, which could lead to changes in project management to safeguard lender interests.

Reliance Infra to Pursue Legal Action

In response, Reliance Infra stated that PSTR is consulting legal experts to explore appropriate measures to protect its position. The company noted that the financial implications of this situation remain uncertain and depend on the eventual resolution. Reliance Infra reaffirmed its commitment to addressing the issue while ensuring compliance with applicable laws and agreements.

Reliance Infra Share Performance

As of December 30, 2024, 12:20 PM, the shares of Reliance Infrastructure are trading at ₹297.00 per share with a decline of 0.65% from its previous day’s closing price. Over the last month, the stock has seen a surge of 7.19%. While over the year the stock has surged by 41.60%.

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