Reliance Infrastructure Requests Review of Trading Restrictions Under ASM Framework
Reliance Infra seeks review of weekly trading curb under ASM framework
Business Standard
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Reliance Infrastructure Limited has formally requested a review of trading restrictions imposed under the Additional Surveillance Measure framework, which limits its stock trading to once a week, affecting over 700,000 shareholders. The company argues these restrictions hinder fair price discovery and investor confidence.
- 01Reliance Infrastructure has submitted a representation to SEBI, NSE, and BSE regarding trading restrictions under the ASM framework.
- 02The current rules allow trading only once a week within a 5% price band, impacting over 700,000 public shareholders.
- 03The company argues that these restrictions lead to predictable price movements and do not reflect true business fundamentals.
- 04Reliance Infrastructure suggests alternatives like a periodic call-auction mechanism to improve trading conditions.
- 05The ASM framework was triggered despite the NCLAT staying the insolvency admission order against the company.
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Reliance Infrastructure Limited has sought a review of the trading restrictions imposed under the Additional Surveillance Measure (ASM) framework, which limits trading of its shares to once a week within a narrow 5% price band. The company claims this restriction adversely affects over 700,000 public shareholders, leading to mechanical price movements that do not accurately reflect its business fundamentals or operational performance. In a formal representation to the Securities and Exchange Board of India (SEBI), National Stock Exchange (NSE), and Bombay Stock Exchange (BSE), Reliance Infrastructure emphasized the need for market mechanisms that support fair price discovery and maintain investor confidence. The company pointed out that the restrictions disproportionately harm retail investors, particularly during lower-circuit phases, making it difficult for them to exit investments at reasonable prices. Reliance Infrastructure proposed a more calibrated approach, retaining key risk-mitigation measures while allowing for better trading conditions, such as a periodic call-auction mechanism or a wider price band. The ASM framework was triggered despite the National Company Law Appellate Tribunal (NCLAT) staying the insolvency admission order against the company, which continues to be managed by its board of directors.
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The trading restrictions on Reliance Infrastructure's shares could lead to significant financial losses for retail investors, affecting their ability to exit investments.
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