Reliance Naval shares slump nearly 14% after Vijaya Bank tags firm as NPA

Shares of Reliance Naval & Engineering slumped nearly 14 per cent today after state-owned Vijaya Bank classified the firm as non-performing asset.

The stock dived 13.43 per cent to end at Rs 14.50 on BSE. Intra-day, it plunged 16.41 per cent to Rs 14 -- its 52-week low.

At NSE, shares of the company tanked 13.73 per cent to close at Rs 14.45.

Its market valuation also declined by Rs 165.49 crore to Rs 1,069.51 crore.

On the equity volume front, 27.11 lakh shares of the company were traded on BSE and over one crore shares changed hands at NSE during the day.

Vijaya Bank has classified the Anil Ambani group-led Reliance Naval & Engineering, whose auditors had recently expressed doubts about the company's ability to continue as a "going concern", as non-performing asset from the March quarter.

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 more than two dozen banks mostly state-owned.

Vijaya Bank said the action was necessitated by the February 12 changes that the Reserve Bank had brought to the NPA resolution framework, which 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 Bank official told PTI over phone from Bengaluru over the weekend.