Anil Ambani’s Reliance Infrastructure reported consolidated net profit of ₹299 crore for the June 2019 quarter, up 19.6% from the ₹250.14 crore it reported in the same period last year, boosted primarily by higher revenue from the power generation business. Revenue stayed flat at ₹5466.72 crore.
In its Q1 earnings disclosure, Reliance Infra disclosed a fragile liquidity position on a host of assets, most importantly of thermal power generation company Reliance Power, where the parent holds 29% shareholding. However, RInfra said in a disclosure to stock exchanges that the management decided no impairment was necessary on these assets and that the current market price of Reliance Power (at ₹3.61 a share) “does not reflect the fundamentals of the business." The notes to accounts also declared shaky liquidity for other businesses - Mumbai Metro One Project Ltd, GF Toll Road Pvt Ltd, TK Toll Road Pvt Ltd, TD Toll Road Pvt Ltd and Vidarbha Industries Pvt Ltd.
In Q1, RInfra reported revenue of ₹300 crore from road projects and ₹85 crore from the Mumbai Metro One project. All the 16 Lenders of Reliance Infrastructure signed an Inter Creditor Agreement (ICA) on July 6 through which the company achieved a standstill for 180 days to implement its resolution plan by monetizing assets. The company’s debt stands at over ₹7200 crore. In July, RInfra announced a plan to monetize its Reliance Center office in Santacruz East (Mumbai) by way of long-term lease, and will use the proceeds only for debt reduction.
RInfra has, in the past, also taken a ₹3972.17 crore provision on its exposure to Reliance EPC, an engineering, procurement and construction firm where RInfra has 2% equity shareholding but has a total exposure of ₹7336.86 crore and corporate guarantees of ₹1775 crore, the company reiterated. During the quarter, RInfra adjusted a loss of ₹629.35 crore for the invocation of a pledge of shares of an associate company.
The notes to account also disclosed that there is a security cover shortfall in listed non-convertible debentures of ₹1101.20 crore indicating that in case of a possible default, the security may be inadequate.
Shares of Reliance Infrastructure closed at ₹45.05 apiece on the BSE on Tuesday, down 4.86%.