Reliance Infrastructure’s record is not merely stressed, it is unauditable in the auditor’s own words. The statutory auditor has disclaimed any opinion on the financial statements for eight straight years, filed a statutory fraud report with the Ministry of Corporate Affairs, and resigned. Three regulators, the Enforcement Directorate, SEBI, and the Serious Fraud Investigation Office, opened proceedings in FY2025‑26 alone. The company sits inside a web of intra‑group exposures that keep turning into provisions, while management routinely overrides impairment triggers by pointing to external valuations.
Key findings
- Three regulators launched proceedings in FY2025‑26, and the auditor filed a fraud report
Critical- The Enforcement Directorate provisionally attached 37 immovable properties, including shareholdings in BSES Rajdhani Power Ltd, BSES Yamuna Power Ltd, and Mumbai Metro One Pvt Ltd, under PMLA during FY2025‑26, and the Adjudicating Authority confirmed the attachment for 365 days in April 2026. SEBI issued a Show Cause Notice dated September 30, 2025 alleging violation of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations. The Serious Fraud Investigation Office sent a communication seeking information on November 19, 2025. The statutory auditor filed a report under Section 143(12) in Form ADT‑4 on January 19, 2026, on account of the allegations in the SEBI Show Cause Notice, and resigned based on its review of that notice and the allegations concerning CLE Private Limited. - Litigation engulfs the Group, with subsidiaries in insolvency and ₹24,733 crore of contested regulatory assets
Major- The standalone entity’s disputed statutory dues total at least ₹9,158 crore as at March 31, 2026. DERC recognised a cumulative Regulatory Asset of ₹24,733 crore for Delhi Discoms as on March 31, 2023, while the Supreme Court by judgment dated August 6, 2025 directed recovery over four years from April 1, 2024, later extended to seven years by clarificatory order dated October 28, 2025. NCLT Mumbai admitted the Company into CIRP on May 30, 2025; NCLAT stayed the order on July 18, 2025, and the matter remains pending. Multiple subsidiaries, including HK Toll Road, GF Toll Road, and TD Toll Road, are in insolvency or have had concessions terminated, and the Supreme Court allowed DMRC’s Curative Petition against DAMEPL, setting aside the arbitral award and directing refund of ₹2,599.17 crore deposited by DMRC, leading to an impairment provision of ₹858 crore. - Intra‑group loans and guarantees repeatedly turn into large impairment provisions
Major- Loans to related parties represented 62.24% of total loans before provision as at March 31, 2026, up from 13.00% two years earlier. Material related‑party impairment provisions in FY2025‑26 alone included ₹451.86 crore against PSTR exposure, ₹345.04 crore against HKTRPL, and ₹311.09 crore against SPL. The company settled corporate guarantees of ₹4,456.29 crore for ₹891.26 crore on September 5, 2023, and ₹1,673 crore for ₹425 crore in FY2024‑25, yet every board report from FY2021 through FY2026 states that no materially significant related‑party transactions were entered into. - Accounting policy changes and NCLT‑scheme adjustments reshape equity and route losses around profit
Major- A ₹5,024.88 crore loss on invocation of Reliance Power shares in FY2019‑20 was adjusted against capital reserve instead of the profit and loss statement, contrary to Ind AS, and the auditor disclaimed opinion on that basis for five consecutive years. In FY2025‑26, the company retrospectively reclassified that same loss to retained earnings with no impact on profit, and the NCLT‑sanctioned amalgamation of Reliance Velocity Limited wiped out the debit balance in retained earnings by charging ₹5,179.96 crore to Capital Reserve and ₹5,533.49 crore to Securities Premium Account, adjustments the auditor states override Ind AS 1 and Ind AS 103. The company also voluntarily changed its accounting policy for investments in subsidiaries from cost‑less‑impairment to fair value through OCI, restating standalone total equity from ₹5,993.27 crore to ₹24,752.23 crore for FY2024‑25 with no P&L impact. - Management overrides impairment indicators on large related‑party exposures by relying on external valuations
Major- As at March 31, 2026, management concluded no impairment was required on net exposures of ₹170.00 crore in one Toll Road SPV and ₹771.64 crore in MMOPL, based on independent valuation reports. The same pattern repeats across years: no impairment on ₹1,533.07 crore in MMOPL and ₹1,324.88 crore in four Toll Road SPVs at March 31, 2025, and no impairment on ₹2,884.70 crore in eight Toll Road SPVs at March 31, 2024, each time citing independent valuations. In FY2023‑24, NHAI terminated the concession for HK Toll Road on January 22, 2024, yet management concluded no impairment was required on its exposure to that subsidiary. - Economic obligations beyond reported borrowings tie up assets and cash
Major- The company settled corporate guarantees of ₹1,673 crore for ₹425 crore under a May 23, 2025 agreement, with no cash call for 10 years and the liability secured by a subservient charge on current assets. Other Financial Liabilities include ₹253.77 crore payable to lenders under a March 28, 2025 Settlement Agreement, secured by a first‑ranking mortgage over Mumbai fixed assets. The company sold its Santacruz investment property as part of a settlement with Yes Bank Limited for a total transaction value of ₹1,200 crore in FY2020‑21 and retains an option to buy it back after 8.5 years. India Ratings affirmed the company’s bank facilities at default grade ‘IND D’ as of November 25, 2024, upgrading them to ‘IND B’ only on July 11, 2025 after three consecutive months of timely standalone debt servicing ended 30 June 2025. - The Group operates through a shifting web of distressed, dormant, and unaudited entities
Minor- The Group consolidates entities where it holds less than 50% of voting rights, stating control arises because the entities derive virtually all funding from the Holding Company. Mumbai Metro One Private Limited reported a net loss of ₹1,276.68 crore in FY2025‑26, negative net worth of ₹3,956.66 crore, and current liabilities exceeding current assets by ₹5,895.59 crore. In FY2025‑26, five subsidiaries with total assets of ₹785.30 crore and two associates were unaudited, with management certifying them as not material. The auditor issued Emphasis of Matter paragraphs on going concern for seven subsidiaries in FY2024‑25.
What to watch
- PMLA attachment confirmation. The Adjudicating Authority confirmed the provisional attachment of 37 immovable properties for 365 days in April 2026; the company’s appeal outcome is pending as disclosed in the FY2025‑26 Annual Report.
- SEBI settlement. The company filed a settlement application in response to the Show Cause Notice dated September 30, 2025, as disclosed in the FY2025‑26 Annual Report.
- SFIO investigation. The Bombay High Court restrained coercive action as of December 24, 2025; the investigation outcome is pending as disclosed in the FY2025‑26 Annual Report.
- CIRP stay. NCLAT stayed the CIRP on July 18, 2025; the matter remains pending as disclosed in the FY2025‑26 Annual Report.
- ICAI disciplinary proceedings. The company initiated proceedings against Chaturvedi & Shah LLP and three signing partners on February 4, 2026; the outcome is pending.
- DERC true‑up. APTEL directed DERC to complete the FY2023‑24 true‑up exercise by June 30, 2026.
Bottom line: This is a record where the auditor has walked away, regulators are inside the gates, and the financial statements carry a going‑concern warning. The numbers the company presents are shaped by a chain of accounting policy changes, NCLT‑scheme adjustments, and impairment calls that lean on valuation reports rather than realised outcomes. The risk is not hidden in a single line, it sits in the gap between what management asserts and what the auditor was willing to stand behind. Watch the regulatory proceedings and the CIRP stay; they will determine whether the structure holds or is unwound by external force.