Does Anil Ambani's Firm Have The Rs 3,300 Crore To Refund In Delhi Metro Case?

The apex court has asked Delhi Airport Metro Express Pvt., a wholly owned subsidiary of Reliance Infrastructure, to refund Rs 3,300 crore to Delhi Metro Rail Corp.

Reliance Infrastructure, in a response to the stock exchange, clarified that the April 10 order passed by the Supreme Court does not impose any liability on the company, and the company has not received any money from Delhi Metro Rail Corp./Delhi Airport Metro Express under the arbitral award.

But, does the Reliance Infrastructure arm have the money?

As part of the arbitral dispute, Delhi Airport Metro Express received a sum of Rs 2,599.18 crore from Delhi Metro Rail till the end of December 2023, according to the quarter earnings filing by Reliance Infrastructure on the stock exchanges. The amount received has now grown to Rs 3,300 crore. 

"The entire proceeds were to be utilised to repay Delhi Airport Metro Express’ lenders," Reliance Infrastructure said in its filings, adding that the balance decretal sum to be recovered from Delhi Metro Rail as on Dec. 31, 2023, stood at Rs 5,045.92 crore. 

The Anil Ambani company had approached the Delhi High court for recovery of the dues and the court ordered for it against the Union of India and Government of National Capital Territory of Delhi to satisfy the award in March 2023.

This Delhi High Court order was challenged by Union of India and Government of NCT of Delhi before the Supreme Court. 

The Delhi Airport Metro Express, in anticipation of the recovery of dues, continued to prepare its financial results on a 'going concern' basis, said the auditor Chaturvedi & Shah in the December quarter filing.

The Delhi Airport Metro Express has accumulated losses, which exceed its net worth; this means its entire equity capital has been wiped out. And now a refund, as ordered by the Supreme Court, puts a question mark on the going concern of this entity and its impact on Reliance Infrastructure.

The auditor alluded that cash flows from the arbitral award would enable Reliance Infrastructure to service its debt. The company had a total liability of over Rs 50,000 crore, on a consolidated basis, at the end of December 2023. 

Reliance Infrastructure posted a loss of Rs 3,221 crore in fiscal 2023 and loss of Rs 1,388 crore for the nine-month period ending December 2023.

The company has signed a Settlement Agreement with JC Flowers Asset Reconstruction Pvt., in settlement of the entire obligations with respect to its borrowings.