Reliance Naval plunges 11% as auditors raise concerns
NEW DELHI: Shares of Reliance Naval and Engineering tumbled over 11 per cent in the afternoon trade on Tuesday after auditors of the company raised doubts about the Anil Ambani-led companys ability to continue as going concern.
The assumption of going concern depends upon the approval of the companys bankruptcy-related resolution plan by secured lenders, their ability to generate cash flows and profit, the auditors Pathak HD & Associates said on Monday.
The defence company, primarily engaged in shipbuilding, cited global downtrend in the industry and delay in defence contracts, which resulted in “temporary financial constraints”. This stoked an erosion of net worth and calling back of loans by secured lenders, leading to an approach for a resolution plan, according to Reuters.
The company on Monday had posted a loss of Rs 409 crore in Q4FY18 over Rs 139.92 loss crore in the same quarter last year.
Standalone total income in January-March 2017-18 dropped sharply to Rs 34.7 crore from Rs 250.8 crore.
Total expenses increased to Rs 249.3 crore over Rs 223 crore during the same period.
The scrip was trading 11.48 per cent down at Rs 23.90 at around 1.20 pm (IST). Shares of the company opened at Rs 24.55 and touched a high and low of Rs 25.95 and Rs 23.75, respectively, in trade so far. Benchmark BSE Sensex was up 88 points, or 0.25 per cent, at 34,538 at around the same time.