- Reliance Infrastructure shares hit 4% lower circuit for fifth consecutive session
- The stock trades only once a week within a 5% price band under ASM framework
- Restrictions stem from insolvency proceedings under the Insolvency and Bankruptcy Code
Reliance Infrastructure Ltd. shares hit the 4% lower circuit for the fifth consecutive trading session after the company disclosed the provisional attachment of its stake in Reliance Power worth Rs 763 crore. The stock continues to trade under weekly restrictions imposed under the insolvency-linked surveillance framework.
Trading in Reliance Infrastructure shares is currently permitted only once a week within a 5% price band after the stock was placed under the Additional Surveillance Measure (ASM) framework linked to the Insolvency and Bankruptcy Code (IBC). Stock exchanges automatically impose the framework on companies undergoing insolvency proceedings to curb excessive volatility.
The trading restrictions have become a key issue for the company, which says the mechanism has affected liquidity and price discovery for its shares.
Reliance Infrastructure said on July 7 that it had submitted a formal representation to the Securities and Exchange Board of India, the National Stock Exchange and the Bombay Stock Exchange, seeking a review of the ASM framework linked to the IBC and the trading restrictions on its shares.
The company said the current framework has adversely affected more than seven lakh public shareholders because trading is allowed only once a week within a narrow 5% price band.
"The current framework, which permits trading only once a week within a narrow 5% price band, results in price movements that are largely mechanical and predictable," the company said in its statement.
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