Reliance Infra seeks review of weekly trading curb under ASM framework

Reliance Infrastructure Limited on Sunday said that it has sought a review of the insolvency-related surveillance framework, under which trading in the company's stock is allowed only once a week.

Reliance Infrastructure Limited, in a statement, said it has submitted a formal representation to the Securities and Exchange Board of India (SEBI), National Stock Exchange (NSE), and Bombay Stock Exchange (BSE), seeking a review of the Additional Surveillance Measure (ASM) linked to Insolvency and Bankruptcy Code (IBC) and the related trading restrictions on its shares.

Citing adverse impact on more than 7 lakh public shareholders, Reliance Infra said that the current framework, which permits trading only once a week within a narrow 5 per cent price band, results in price movements that are largely mechanical and predictable.

 

It emphasised the need to ensure that market mechanisms continue to facilitate fair price discovery and maintain investor confidence.

"The company believes that such restrictions may not adequately reflect prevailing business fundamentals, operational performance or long-term value creation potential," it said.

According to the statement, Reliance Infrastructure shares are otherwise actively and widely traded in the market, reflecting sustained investor participation and liquidity.

The company said the continuation of such anomalous and artificial trading restrictions is counterproductive to the interests of 7 lakh retail and small public shareholders and undermines the efficient functioning of the market.

The company further submitted that the impact of these restrictions falls disproportionately on its public shareholders.

"During lower-circuit phases, shareholders are often unable to exit their investments at a reasonable market price, while the value of their holdings erodes by a near-fixed percentage each week," the statement said.

In its representation, Reliance Infrastructure has proposed a calibrated approach that retains key risk-mitigation measures, including gross settlement, 100 per cent margin requirements, Additional Surveillance Deposit (ASD) and price-band safeguards, while enabling more effective price discovery.

"The Company has requested regulators to consider alternatives such as a periodic call-auction mechanism or a wider and graded price band to facilitate genuine two-sided trading," it said.

According to the company, the ASM framework was triggered despite the National Company Law Appellate Tribunal (NCLAT) staying both the insolvency admission order and the Corporate Insolvency Resolution Process (CIRP) against Reliance Infrastructure.

No resolution professional has assumed control of the company and that its affairs continue to be managed by its duly constituted board of directors in the normal course of business, it said.

Reliance Infrastructure is engaged in developing projects through various special purpose vehicles in several high-growth sectors, including power, roads and metro rail.