Reliance Infra hits 5% UC

Anil Ambani owned, Reliance Infrastructure is among the top five gainers on the BSE and is locked at the 5% UC at Rs.24.25 in this otherwise lackluster market.

The stock is up after the company stated today morning that it has won a major Arbitration Award of Rs. 1,250 crore against Damodar Valley Corporation (DVC), a Government of India undertaking.

A three-member Arbitration Tribunal unanimously gave the award in favour of Reliance Infrastructure on December 21, 2019. Reliance Infrastructure was the Engineering & Construction contractor for Damodar Valley Corporation's 2 x 600 MW Raghunathpur thermal power project in West Bengal commissioned in 2012.

The Arbitration Tribunal awarded the case in favor of Reliance Infrastructure and directed Damodar Valley Corporation to pay Rs. 896 crore and return the Bank Guarantees of Rs. 354 crore within four weeks or pay additional interest, at the rate of 15% per annum, for any delay in payment beyond four weeks.

Pursuant to the recent Niti Aayog circular, Reliance Infrastructure will request DVC to pay 75% of the Arbitral Award against Bank Guarantee immediately.

The proceeds will be used to pay lenders and reduce the debt of the Company.