Reliance Infrastructure Limited — financial distress indicators
Financial-health summary
Reliance Infrastructure Limited's reported numbers place it in the 'Watch' financial-health band (distress score 36/100). The main indicators are operating profit does not cover interest, market-implied default probability >20% and deep share-price drawdown. Independently, the Ohlson accounting model puts its 1-year failure probability at 53% and the market-implied (Merton) default probability is 91.1%. In its favour: operating cash flow is positive over the latest 12 months.
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Interest coverage (EBIT / interest) is 0.94×.
When EBIT < interest, debt service is funded from cash reserves or new borrowing — the classic precursor to payment default and covenant breach.
Merton distance-to-default -1.34 σ → PD 91%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
Price is -78% from its 52-week high.
For financial firms a share-price run often precedes a deposit or funding run (confidence channel).
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Operating cash flow is positive over the latest 12 months.
📰 Recent news scan
- Reliance Infrastructure Ltd. Upper Circuit: Price and Key Data - UnivestGoogle News · 2026-10-05
- Reliance Infrastructure Ltd. Shareholding Pattern – Promoters, FIIs & DIIs - Value ResearchGoogle News · 2026-08-28
- 15% Jump In Three Sessions: Reliance Infra Share Price Gains 5% For Third Consecutive Day - NDTV ProfitGoogle News · 2026-08-05
- Reliance Infra targets relief for 7 lakh retail shareholders and launches 3 AI-focused units - SahiGoogle News · 2026-06-08
- Reliance Infra shares hit 5% upper circuit, up 33% in 6 days; here's why - Business StandardGoogle News · 2026-06-08
- Reliance Infrastructure Limited (RELINFRA.BO) stock price, news, quote and history - Yahoo Finance UKGoogle News · 2026-04-16
⚖️ Indian legal pathway — the IBC, 2016
How insolvency starts
- A financial creditor (§7), an operational creditor after a demand notice (§§8–9) or the company itself (§10) can apply to the NCLT once a default of at least ₹1 crore occurs (§4).
- On admission a moratorium (§14) stops suits and recovery; the board is suspended and an insolvency professional runs the company.
- The Committee of Creditors approves a resolution plan with 66% of voting share (§30(4)) within an outer limit of 330 days (§12); otherwise liquidation (§33) under the §53 waterfall — equity ranks last. Defaulting promoters are generally barred from bidding (§29A).
Earlier warning stages
- RBI's Prudential Framework for Resolution of Stressed Assets (7 June 2019): lenders must review a borrower within 30 days of default and implement a resolution plan, or provide more.
- Listed companies must disclose loan defaults to exchanges under SEBI (LODR); a rating downgrade to “D” is a public signal.
- Auditors must report going-concern uncertainty (SA 570 / Ind AS 1).
Frequently asked questions
What do Reliance Infrastructure Limited's financial-health indicators show?
As of 2026-10-09, Reliance Infrastructure Limited's public financial data places it in the 'Watch' band with a distress score of 36/100, driven by operating profit does not cover interest, market-implied default probability >20% and deep share-price drawdown. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is Reliance Infrastructure Limited's financial distress score?
36/100 ('Watch'). Ohlson O-score 0.11 (model 1-year failure probability 53%). Merton distance-to-default -1.34 σ (model default probability 91.1%).
What works in Reliance Infrastructure Limited's favour?
Operating cash flow is positive over the latest 12 months.
How are shareholders treated if a company enters insolvency?
Under the IBC the Committee of Creditors controls the resolution; the §53 waterfall pays secured creditors and workers first and equity last. In most resolution plans existing shareholders are wiped out or left with a token stake, and the company may be delisted.
Other Utilities & Power companies with distress indicators
- GVK Power & Infrastructure Limited (GVKPIL)Very weak 80/100
- Reliance Power Limited (RPOWER)Weak 58/100
- Energy Development Company Limited (ENERGYDEV)Weak 55/100
Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.