Synopsis
Reliance Industries Limited's shares fell after the Delhi High Court reversed an earlier ruling in a gas migration dispute. The government has increased its claim to $2.81 billion. Reliance is challenging the decision in higher courts.Key Takeaways
- Reliance shares dropped 1% to Rs 1,159.55.
- Delhi HC reversed an arbitral award ruling.
- Government's claim increased to $2.81 billion.
- Reliance is appealing the division bench's decision.
- Stock declined 22.45% over the past year.
Mumbai, March 4 (NationPress) The shares of Reliance Industries Limited experienced a further decline on Tuesday, following a decision from the Delhi High Court that overturned a prior ruling.
In light of the legal confusion, the company’s stock fell by up to 1 percent, reaching Rs 1,159.55 per share during intra-day trading.
This ruling pertains to an arbitration award obtained by Reliance, alongside BP Exploration (Alpha) Limited and NIKO (NECO) Limited, regarding a dispute with the government over alleged gas migration from ONGC’s blocks in the KG-D6 region.
In the initial case, the government accused the consortium of causing gas migration, leading to a demand for compensation amounting to $1.55 billion.
On May 9, 2023, a single-judge bench of the Delhi High Court dismissed the government's appeal, affirming the arbitration award in favor of the consortium.
However, the government contested this ruling and lodged an appeal with a division bench of the Delhi High Court.
The division bench subsequently reversed the earlier decision, which had a significant effect on Reliance’s stock price.
In response to the court's ruling, the Ministry of Petroleum and Natural Gas issued a demand letter to Reliance, BP Exploration, and NIKO, increasing the claim amount to $2.81 billion.
This revised figure incorporates extra calculations related to the gas migration issue, representing a substantial rise from the original demand.
Reliance Industries has declared that it is vigorously contesting the division bench's decision and is seeking legal counsel to escalate the matter to higher courts.
Over the past year, Reliance's stock has seen a decline of 22.45 percent or Rs 345.45 on the National Stock Exchange (NSE).
Meanwhile, shares of Reliance Group companies suffered a sharp decline on March 3, erasing over Rs 40,000 crore from their market capitalization.
The total market valuation of these companies plunged by Rs 40,511.91 crore, bringing it down to Rs 17.46 lakh crore on Monday.
