Reliance Infrastructure shares fall 2% on DSRA default notices

Shares of Reliance Infrastructure Ltd dropped nearly 2% in early trade on Monday, reaching ₹293.10, following announcements regarding its subsidiary, PS Toll Road Private Limited (PSTR). The company’s subsidiary received notices from Axis Bank and IDFC First Bank, invoking the “right of substitution” under the Concession Agreement for the six-laning project of the Pune-Satara section of NH-44 in Maharashtra.

Key Developments:

• Default Notices: Axis Bank and IDFC First Bank issued notices to PSTR on December 26, 2024, citing alleged defaults in maintaining the Debt Service Reserve Account (DSRA). This account is designed to ensure the company can meet its debt obligations.
• Right of Substitution: Invoking this clause allows lenders to potentially take over the project’s management if specified conditions, such as defaults, are not rectified.
• Reliance Infra’s Response: The company stated it would seek legal advice and take appropriate measures to safeguard its interests. However, the financial impact on the company remains uncertain.
• Project Background: The notices pertain to the six-laning project of the Pune-Satara section of NH-44 in Maharashtra, a significant toll-based infrastructure initiative managed by PSTR.

Market Reaction:

As of 9:15 AM, Reliance Infrastructure’s shares were trading at ₹293.10, down 1.96%, reacting to the latest developments concerning the subsidiary.