This Reliance firm hit record low today, tanked 70 pct so far in 2018
The stock of shipbuilding and fabrication firm settled at Rs 14.50, down 13 per cent on the BSE. Reliance Naval stock has lost over 70 per cent this year as of today’s close.
Reliance Naval and Engineering plunged as much as 16.4 per cent to hit its record low of Rs 14 after the state-owned lender Vijaya Bank classified Reliance Naval’s account as a non-performing asset from the March quarter. The stock of shipbuilding and fabrication firm settled at Rs 14.50, down 13 per cent on the BSE. Reliance Naval stock has lost over 70 per cent this year as of today’s close.
The auditors of Anil Ambani group-led firm had recently expressed doubts about the company's ability to continue as a "going concern".
In a note in the FY18 earnings statement, its auditors Pathak HD & Associates had raised doubts about the company's ability to "continue as a going concern".
Auditors listed cash losses, networth erosion, loan recall back by secured lenders, mounting current liabilities which are substantially higher than assets and winding up petitions by a few operating creditors to raise its doubts.
The company, which was earlier known as Pipavav Defence & Offshore Engineering, was bought over by Anil Ambani group in 2016 and renamed it as Reliance Defence & Engineering. It owes over Rs 9,000 to over two dozen banks mostly state-run, led by the troubled IDBI Bank.
The Bengaluru-based Vijaya Bank said the action was necessitated by the February 12 changes that the Reserve Bank had brought to the NPA resolution framework, reported PTI. The latest RBI directive, while scrapping all the existing frameworks, including debt restructuring, asked banks to consider even one-day delay in payments as default which if not cleared in 180 days should be sent to NCLT for bankruptcy proceedings.
"A few accounts, including Reliance Naval, were under various restructuring schemes like the SDR and S4A by all the lenders. With the February 12 circular, the RBI made it clear that all those accounts where restructuring could not happen by then, have to be treated as NPAs.
"Reliance Naval was under restructuring (SDR), but the implementation could not happen, and so, it slipped into NPA from the March quarter," a senior Vijaya Ban official told PTI.
The official further said the bank has made adequate provisions for the Reliance Naval account in the March quarter without disclosing how much is its exposure and how mich it has provided for.
As of March 2017, Reliance Naval had an outstanding borrowings of Rs 8,753.19.38 crore.
In the March 2018 quarter, it reported a threefold jump in net loss to Rs 408.68 crore from Rs 139.92 crore in the previous 12 months period. For the full year to March 2018, its net loss almost doubled to Rs 956.09 crore from Rs 523.43 crore in previous year.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.