Stocks of Anil Ambani-run Reliance Group companies bounced back strongly on Wednesday, with Reliance Infrastructure Ltd surging as much as 25% after the company said it has bagged Rs 7,000 croreVersova-Bandra Sea Link project contract from Maharashtra State Road Development Corporation (MSRDC) in Mumbai.
The rally in Reliance Infrastructure pushed up other stocks of the group, too. Reliance Capital climbed as much as 17.8%, Reliance Power gained 14%, Reliance Home Finance was up 10%, Reliance Naval and Engineering shot up 8.8% while Reliance Communications rose 4%.
The Versova-Bandra Sea Link is a marquee project with a length of 17.17 km, which is three times the length of the Bandra-Worli Sea Link of 5.6 km. Reliance Infrastructure said it is fully geared to deliver the project in 60 months from the appointed date of 24 June 2019 as per the contract.
The Reliance Group stocks have had a tough run in the last few weeks. Reliance Infrastructure reported a consolidated net loss of Rs 3,301 crore in the March quarter, its biggest ever loss. Last week, ratings agency India Ratings also downgraded its long-term issuer rating to ‘D - Issuer Not Cooperating’.
Meanwhile, PwC had resigned as the statutory auditor of Reliance Capital and Reliance Home Finance citing ‘certain observations’ during its ongoing assessment of FY18-19. PwC had said that Reliance Capital disputed the observations highlighted by the audit firm and did not convene an audit committee meeting within the expected time. The companies, however, denied any wrongdoing.
Last week, Reliance Capital said it has repaid Rs 875 crore of outstanding commercial paper in the last two months, and that it will repay the balance Rs 75 crore by its maturity date.
“ICRA had revised the ratings on our Short-Term Debt Programme (CPs) of Rs 950 crore to A4 on April 26. The ICRA rating will thereupon stand terminated,” it said in a regulatory filing on Friday.