Reliance Infrastructure urges SEBI, NSE and BSE to review trading restrictions linked to IBC cases

Reliance Infrastructure Ltd has approached the Securities and Exchange Board of India (SEBI), the NSE and the BSE, seeking a review of the surveillance framework applicable to companies linked to proceedings under the Insolvency and Bankruptcy Code (IBC).

In a formal representation submitted to the market regulators and exchanges, the company has requested a review of the Additional Surveillance Measure (ASM) framework and the trading restrictions currently imposed on its shares.

Reliance Infrastructure said the restrictions are adversely affecting more than 7 lakh public shareholders and called for measures that support fair price discovery while maintaining investor confidence.

Company Raises Concerns Over Current Trading Framework

According to the company, the existing framework permits trading in its shares only once a week and within a narrow price band of plus or minus 5%.

Reliance Infrastructure argued that such restrictions lead to price movements that are largely mechanical and predictable, rather than driven by the company's business performance, operational developments, or long-term value-creation prospects.

The company stated that its shares otherwise witness active trading and investor participation. It contended that the continuation of these restrictions is impacting liquidity and limiting the market's ability to determine the stock's fair value.

Impact on Public Shareholders

Reliance Infrastructure said the current system has a disproportionate impact on its public shareholders, particularly retail investors.

The company noted that during periods when the stock hits lower circuits, shareholders often find it difficult to exit their investments at reasonable market prices. It added that the value of their holdings may decline by a nearly fixed percentage each week because of the restricted trading mechanism.

According to the company, such conditions may not serve the interests of more than 7 lakh retail and small shareholders and could affect the efficient functioning of the market.

Call for Balanced Regulatory Safeguards

In its representation, Reliance Infrastructure urged regulators to reassess the once-a-week trading restriction and consider safeguards that balance market surveillance objectives with shareholder interests.

The company said it supports the need for risk-management measures but believes that the present framework limits effective price discovery.

As part of its proposal, Reliance Infrastructure suggested retaining key safeguards such as gross settlement, 100% margin requirements, Additional Surveillance Deposit (ASD) and existing price-band protections.

At the same time, it requested regulators to explore alternatives such as a periodic call-auction mechanism or wider and graded price bands that could allow genuine two-way trading while continuing to address market risks.

Company Cites NCLAT Stay on Insolvency Proceedings

Reliance Infrastructure also pointed out that 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 the company.

The company stated that no Resolution Professional has taken control of its operations and that its affairs continue to be managed by its Board of Directors in the normal course of business.

Focus on Long-Term Value Creation

Reliance Infrastructure said it will continue to engage constructively with regulators and market institutions while remaining focused on creating long-term value for shareholders.

The company maintained that any review of the current framework should seek to protect investors while also ensuring efficient market functioning and fair price discovery.