Reliance Naval plunges over 13% as auditors raise doubts over co's future

Shares of Reliance Naval and Engineering cracked over 13 per cent after auditors of the Anil Ambani-led firm raised doubts about the company’s ability to “continue as a going concern“.

The stock slumped 13.33 per cent to end at Rs 23.40 on BSE. Intra-day, it tumbled 18.14 per cent to Rs 22.10 -- its 52-week low. The company’s market valuation also came down by Rs 265.04 crore to Rs 1,725.96 crore.

Selling was also seen in other Reliance group stocks, with

Reliance Communications tumbling 10.47 per cent, Reliance Power 4.18 per cent, Reliance Infrastructure 1.89 per cent and Reliance Capital 1.34 per cent.

In its notes to the company’s 2017-18 earnings statement, auditors Pathak H.D. & Associates listed cash losses, erosion of network, loans being called back by secured lenders, current liabilities being substantially higher than assets and winding up petitions being filed by few operating creditors to raise its doubts.

“These conditions indicate the existence of a material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern,” the auditor said in the note.

The company had yesterday reported widening of its net loss to Rs 408.68 crore in January-March quarter of 2017-18 fiscal year from Rs 139.92 crore net loss in the same period of the previous financial year.

For the full year 2017-18, it had posted a net loss of Rs 956.09 crore compared with a net loss of Rs 523.43 crore in the previous year.