Winning Bizness Desk
Mumbai.The Indian government has issued a demand notice of $2.81 billion (₹24,522 crore) to Reliance Industries. The notice was sent by the Ministry of Petroleum and Natural Gas. This development follows a ruling by the Delhi High Court and pertains to the ONGC block (KG-D6). The allegations against Reliance include gas migration from the ONGC block, leading to the financial demand.
International Arbitration Ruling in Reliance’s Favor
This case had reached an international arbitration tribunal, where the Reliance-led consortium secured a favorable verdict in 2018. The international arbitrator had ruled in favor of Reliance, awarding them $1.55 billion (₹13,528 crore). However, the Indian government challenged the arbitration ruling in Delhi High Court, leading to a prolonged legal battle.
Delhi High Court’s Division Bench Overturns Previous Ruling
In May 2023, a single-judge bench of the Delhi High Court had ruled in favor of Reliance. The Indian government, dissatisfied with this decision, appealed to the division bench of the Delhi High Court. Now, the division bench has overturned the previous ruling, leading to the issuance of the fresh demand notice against Reliance Industries by the Indian government.
Reliance Shares See Decline Amid Legal Dispute
Following this news, Reliance Industries' shares witnessed a decline. On Tuesday, March 4, the stock fell by 0.41%, trading at ₹1,166. Over the past five days, the company’s stock has dropped by 3.05%, and in the last month, it has declined by 9.26%. The six-month and one-year stock performance have also been negative, with drops of 23% and 22.64%, respectively.
Reliance Reports Strong Q3 Profit Despite Legal Challenges
Despite ongoing legal disputes, Reliance Industries reported a profit of ₹18,540 crore for the third quarter of the financial year 2024-25. This reflects a 7.38% year-on-year growth compared to ₹17,265 crore in the same quarter last year. Additionally, the company’s operational revenue stood at ₹2.44 lakh crore in the October-December quarter, marking a 7% increase from ₹2.28 lakh crore in the previous year. Reliance remains India’s largest private-sector company, operating across multiple industries, including hydrocarbon exploration, petroleum refining, petrochemicals, renewable energy, digital services, and retail.
