Reliance Infra Stock Hits Lower Circuit For 5th Consecutive Session Amid ASM Trading Restrictions

Shares of Reliance Infrastructure continued their downward trajectory, hitting the 5% lower circuit for the fifth consecutive trading session following the company’s announcement of a provisional attachment of its stake in Reliance Power, valued at Rs 763 crore.

The stock declined to Rs 66.70 apiece on Monday.

The scrip remains under weekly trading restrictions imposed under the Additional Surveillance Measure (ASM) framework tied to insolvency proceedings under the Insolvency and Bankruptcy Code (IBC).

The ASM framework restricts trading to once a week within a 5% price band, a mechanism automatically applied by stock exchanges to companies undergoing insolvency-related processes.

While intended to curb excessive market volatility, Reliance Infrastructure has flagged the restrictions as a significant concern, citing their adverse impact on liquidity and the ability of investors to determine fair market prices.

The company formally communicated its concerns on July 7, submitting representations to the Securities and Exchange Board of India (SEBI), the National Stock Exchange (NSE), and the Bombay Stock Exchange (BSE), requesting a review of the ASM framework and the associated trading limitations.

Reliance Infrastructure emphasized that these constraints have affected more than seven lakh public shareholders, as the once-a-week trading schedule and narrow 5% band result in largely mechanical and predictable price movements.

According to the company, the ASM-linked restrictions have not only limited active participation by investors but also hampered the price discovery process, preventing the stock from reflecting true market dynamics.

The company highlighted that the current arrangement, while regulatory in nature, poses challenges for shareholders seeking liquidity and fair value realization in their investments.

Despite the provisional stake attachment in Reliance Power, the market’s reaction has been exacerbated by the ASM framework, with shares repeatedly hitting the lower circuit.

Reliance Infrastructure continues to engage with regulators to address these concerns and seek a framework that balances investor protection with market efficiency.

The outcome of these discussions could have significant implications for the trading behavior and valuation of the company’s shares going forward.