Reliance Infra arm receives notice on alleged ‘DSRA defaults’ from Axis, IDFC First Bank

Reliance Infrastructure Ltd (Reliance Infra) on Friday said that its wholly owned subsidiary, PS Toll Road Private Limited (PSTR), has received notices from Axis Bank and IDFC First Bank on December 26, 2024. The notices are related to PSTR’s toll project on the Pune-Satara section of NH-44 in Maharashtra.

“We hereby inform you that PSTR has received Notices dated December 26, 2024, from Axis Bank Limited and IDFC First Bank Limited, invoking the right of substitution under the Concession Agreement for six-laning the Pune Satara section of NH-44 in Maharashtra, for and on behalf of lenders of PSTR citing alleged DSRA defaults by PSTR,” the company said in a statement.

The ‘right of substitution’ allows the banks to take control of the project if certain conditions, like payment defaults, are met.

As per Reliance Infra, Axis Bank and IDFC First Bank have flagged issues with the DSRA, which is an account meant to ensure the company can meet its debt obligations. If PSTR is unable to maintain this account, the banks can step in to protect their interests, potentially leading to a change in the management or control of the project.

Reliance Infra added that its unit will seek legal advice and take appropriate steps to safeguard its interests on the matter.

“The financial impact on the company cannot be determined at this stage, if any, and will depend on the final outcome,” the company said.

Reliance Infrastructure’s shares closed 1.2% lower before the announcement of the notice, closing at ₹298.50 on Friday. The stock has, however, risen by nearly 50% year-to-date.

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