Anil Ambani's Reliance Power Ltd.'s share price hit the 5% lower circuit on Friday after the government body in charge of implementing the National Solar Mission barred it from bidding in future tenders for three years after it was found to have submitted fake bank guarantees.
The Solar Energy Corp. of India Ltd.'s action stems from the bid submitted by Reliance NU BESS for the setting up of 1,000 MW/2,000 MWh standalone BESS projects. The tender for the project was issued by SECI in June.
Based on the documents submitted by Reliance NU BESS Ltd., earlier known as Maharashtra Energy Generation Ltd., it was found that the endorsement of the bank guarantee against the earnest money deposit was fake, SECI said.
The Government of India enterprise found it logical to conclude that all the commercial and strategic decisions undertaken were fundamentally driven by the parent company. "Thus, it became imperative to debar Reliance Power from participating in the future tenders issued by SECI."
Meanwhile, Reliance Power said it will legally challenge SECI's decision, calling it "unwarranted action". The company said it has been a victim of fraud, forgery, and criminal conspiracy and has filed a case with the Delhi Police in October.
The company said it will take all appropriate legal steps to challenge the decision "in the interest of its more than 40 lakh shareholders".
Shares of Reliance Power fell as much as 5% to hit the lower circuit of Rs 41.58 apiece on the NSE on Friday. This compares to a 0.1% decline in the benchmark Nifty 50 as of 9:33 a.m.
The stock has risen 103% during the last 12 months and by 78% on a year-to-date basis. The relative strength index was at 48.
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