On one hand, elder brother’s stock is hitting historical new highs and younger one is consistently locked in lower circuits. Reliance Capital was locked at the 5% LC yesterday at Rs.19 and today too, the moment it opened for trade, it hit the LC at Rs.18.05. Its 52-week low stands at Rs.12.40.
Yesterday, the company announced that payment of interest on non-convertible debentures (NCDs) has been delayed. This was due on 18th Nov’19.
Post the rating agency, CARE’s downgrade of entire outstanding debt to default "CARE D" rating, it led to acceleration, etc. of various facilities by certain lenders and consequential demands for immediate payment of amounts that were otherwise due and payable in a phased manner over the next 8 years till March 2028, as per the original terms of lending. It is expected that the debt servicing of the company in relation to the accelerated amounts and otherwise will be delayed.
And in another announcement, the company said that its wholly owned subsidiary, Reliance General Insurance Company (RGIC), has been transferred to IDBI Trustee Services Limited, upon invocation of pledge by the Trustee. This puts a spanner in its debt reduction plans as it was planning to monetize its holding in RGIC in a bid to raise money for debt reduction.