Mumbai, March 4 (IANS) Shares of Reliance Industries Limited continued to slide on Tuesday, following a ruling from the Delhi High Court that reversed a previous judgment.
Amid the legal uncertainty, the company’s shares dropped by as much as 1 per cent, reaching Rs 1,159.55 per share during the intra-day trade.
This ruling concerns an arbitral award won by Reliance, along with BP Exploration (Alpha) Limited and NIKO (NECO) Limited, in a dispute with the government over alleged gas migration from ONGC’s blocks in the KG-D6 area.
In the original case, the government accused the consortium of causing gas migration, which led to a demand for compensation of $1.55 billion.
On May 9, 2023, a single-judge bench of the Delhi High Court dismissed the government’s appeal, upholding the arbitral award in favour of the consortium.
However, the government did not accept the ruling and filed an appeal with a division bench of the Delhi High Court.
The division bench reversed the earlier decision, which significantly impacted Reliance’s share price.
Following the court’s decision, the Ministry of Petroleum and Natural Gas issued a letter of demand to Reliance, BP Exploration, and NIKO, raising the claim amount to $2.81 billion.
This new figure includes additional calculations related to the gas migration issue, representing a sharp increase from the original demand.
Reliance Industries has announced that it is actively challenging the division bench’s ruling and has sought legal advice to pursue the matter in higher courts.
Over the past year, Reliance’s stock has fallen by 22.45 per cent or Rs 345.45 on the National Stock Exchange (NSE).
Meanwhile, the stocks of Reliance Group companies experienced a sharp drop on March 3, wiping out over Rs 40,000 crore from their market capitalisation.
The combined market valuation of these companies fell by Rs 40,511.91 crore, reducing it to Rs 17.46 lakh crore on Monday.
–IANS
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