Reliance Naval in deep waters

Reliance Naval is in the eye of a storm. The IDBI Bank has moved the National Company Law Tribunal (NCLT) against the company for debt resolution under the Insolvency and Bankruptcy Code. IDBI Bank is not the first to do this – IFCI has already filed a similar application in November, which is yet to be admitted.

Bankers claim that the company owes a total of around Rs.9000 crore (principal+interest).

If one may recollect, last week, the company had made a one-time settlement offer to the lenders, which they did not approve as it entailed a very sharp haircut. Banks are still hoping for a better deal to come from the promoter, much before the bidding process begins.

The company, earlier known as Gujarat Pipavav was acquired by Anil Ambani in 2015. It has ended Q1FY19 with a consolidated loss of Rs.1100 crore.

The stock, not surprisingly in the top loser on the BSE currently, down over 4.5% at Rs.15.40. Its 52-week low is at Rs.11.33.