Mumbai: Shares of Reliance Naval and Engineering Ltd, an Anil Dhirubhai Ambani Group company, have jumped nearly 1000% in the last eleven weeks even as the company has continued to post losses and faces cash crunch.
The stock hit a record low of ₹0.70 on 11 September. However, since then the stock has hit the 5% upper circuit for 51 consecutive trading sessions. The scrip advanced 995% during the period, while shares are down nearly 45% so far this year.
The company has reported losses for 14 consecutive quarters, while consolidated gross debt stood at ₹10916.15 crore as of end of fiscal 2019.
During the financial year 2018-19, the company reported aggregate revenue of about ₹184.63 crore against ₹413.84 crore in the previous year and incurred a loss of ₹10,481.04 crore compared with a loss of ₹956.08 crore in the previous year
Recently, the company in its annual report disclosed that it was facing an acute crunch in cash flow due to orders having dried up.
"The Company is also facing several challenges which are impacting its operations. There is an acute cash flow crunch as the expected Debt Resolution is yet to be actualized. This is impacting the progress of the existing projects leading to extended timelines and thereby leading to erosion of confidence amongst clients," the company said in its 2019 annual report. "This lack of new orders has led to the significant reduction in the Company’s current level of operations as compared to its capacity."
IDBI Bank had filed an application in 2018 to initiate insolvency and bankruptcy proceedings against the company.
The company, earlier known as Pipavav Defence & Offshore Engineering, has been facing severe financial headwinds since 2013. It was bought over by Anil Ambani group in 2016 and renamed Reliance Defence and Engineering.