Reliance Power’s record has moved from chronic financial stress into active legal jeopardy. The consolidated audit opinion is qualified for the first time, and a lender has dragged the parent into insolvency proceedings after a ₹1,819.94 crore guarantee was invoked.
Key findings
- A lender has initiated insolvency proceedings against the parent after a ₹1,819.94 crore guarantee default
Critical- A lender filed a corporate insolvency application against Reliance Power under Section 7 of the IBC after its subsidiary Samalkot Power defaulted on borrowings of ₹1,819.94 crore that the parent had guaranteed. Separately, the Enforcement Directorate filed a money-laundering prosecution and, on July 11, 2026, provisionally attached promoter-held shares for an amount of ₹762.75 crore. SEBI has also ordered a forensic audit, and the CBI searched the registered office on July 18, 2026. - The consolidated group carries ₹14,812 crore of borrowings with ₹3,232 crore of overdue principal
Major- Consolidated borrowings stood at ₹14,812 crore as of March 31, 2026, with overdue principal of ₹3,232.22 crore included in current maturities. Samalkot Power alone had an outstanding USD 184.89 million loan from US Exim that the lender refused to extend, and the parent’s NCDs have carried a default rating since July 22, 2015. - Promoter shareholding stands at 24.98% while an executive director was arrested
Major- Promoter holding is 24.98% with no change in the most recent year [SQL]. Executive Director and CFO Ashok Kumar Pal resigned on October 11, 2025 following his arrest. At the July 2022 and July 2023 AGMs, public institutional shareholders voted 97.74% and 98.09% against Resolution 1, the adoption of financial statements. - The group faces material contingent liabilities including a ₹1,819.94 crore guarantee in arbitration and an ₹865 crore disputed tax demand
Major- The Samalkot Power lender demanded ₹1,819.94 crore under the parent’s corporate guarantee, and the matter is in arbitration at the London Court of International Arbitration. Sasan Power faces a disputed tax liability of ₹865.19 crore under MPGATSVA, with a Supreme Court order requiring principal to be paid over 12 years from April 1, 2026. - The group revalued freehold land upward by ₹1,137 crore, capitalises large exchange losses, and carries ₹2,749 crore of unrecognised deferred tax assets
Major- The group switched freehold land from the cost model to the revaluation model effective January 1, 2025, adding ₹1,137.44 crore to the carrying value through other comprehensive income. Exchange losses of ₹152.04 crore on long-term borrowings were added to the cost of plant and equipment in FY2025. Unrecognised deferred tax assets on unabsorbed depreciation and MAT credit totalled ₹2,748.96 crore as of March 31, 2026.
What to watch
- SEBI forensic audit. The audit ordered during FY2025-26 for alleged violations of the SEBI Act, SCRA, and Companies Act is ongoing.
- Corporate insolvency resolution. The CIRP application filed under Section 7 of the IBC against Reliance Power subsequent to March 31, 2026 awaits admission.
- Samalkot Power arbitration. The arbitration at the London Court of International Arbitration against the lender and Citibank N.A. is ongoing as of the FY2025-26 reporting period.
- Promoter receivables recovery. Recovery of ₹272.64 crore from Reliance Infrastructure to Dhursar Solar remains unassessed for credit loss as of March 31, 2026.
- Indonesian asset sale. The sale of five Indonesian step-down subsidiaries to Biotruster (Singapore) Pte. Ltd. was subject to conditions precedent and the assets were not classified as held for sale as of March 31, 2026.
Bottom line: This is a record where the auditor has formally broken ranks, the Enforcement Directorate has attached assets confirmed by the adjudicating authority, and a lender has pushed the parent to the door of insolvency court. The risk is not hidden in footnotes; it sits in the qualified opinion, the ₹3,232 crore of overdue principal, and the promoter-group receivables that no one has assessed for recovery. Watch the admission of the CIRP application and the outcome of the SEBI forensic audit.