Reliance Power Limited Reliance Power and its subsidiary Reliance CleanGen Limited have received a pre-cognizance notice from the Special Judge, CBI, New Delhi. The notice pertains to a complaint filed by the Enforcement Directorate (ED) concerning an alleged amount of approximately ₹715 crore under sections 3 and 4 of the Prevention of Money Laundering Act (PMLA). The matter involves Reliance Home Finance Limited and others.

The legal proceeding is currently at the pre-cognizance stage under Section 223 of the Bharatiya Nagarik Suraksha Sanhita, 2023. This procedural step allows the court to examine whether there are sufficient grounds to register a formal case or proceed with further investigation based on the ED's complaint.

Regulatory Disclosure

The company made the disclosure pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The filing also references SEBI Circular No. HO/49/14/14(7)2025-CFD-POD2/I/3762/2026 dated January 30, 2026, which mandates timely disclosure of material events that could impact the company's operations or financial position.

Financial Implications

Reliance Power stated that the expected financial implication of the notice is not ascertainable at this stage. The company affirmed that it will take all appropriate steps to safeguard its interests as legally advised. As the matter is in its early procedural phase, no immediate impact on the company's balance sheet or cash flows has been quantified by management.

Reliance Power reported a consolidated net profit of ₹6,471 lakh (₹647.1 million) for the quarter ended June 30, 2026 (Q1FY27), marking a 45% year-on-year increase from ₹4,468 lakh in the corresponding period of FY26. The improvement was driven by higher revenue from operations, which rose 3.8% to ₹19,563.2 lakh, offsetting a slight decline in EBITDA. The Board of Directors approved the unaudited financial results on August 06, 2026, alongside disclosures regarding ongoing legal proceedings and subsidiary defaults.

Financial Performance Overview

The company’s top-line growth was supported by increased generation activity, although operating margins faced pressure due to rising fuel costs. Consolidated revenue from operations stood at ₹19,563.2 lakh, compared to ₹18,855.8 lakh in Q1FY26. Other income contributed ₹1,474.3 lakh, bringing total income to ₹21,037.5 lakh.

Despite the revenue uptick, EBITDA declined marginally to ₹5,620 lakh from ₹5,650 lakh in the previous year, resulting in an EBITDA margin contraction to 28.75% from 29.97%. This indicates that cost increases, particularly in fuel consumption which rose to ₹10,319.2 lakh from ₹9,357.3 lakh, outpaced revenue growth.

Standalone Results and Subsidiary Issues

On a standalone basis, Reliance Power recorded a profit before tax of ₹320 lakh, up from ₹190 lakh in Q1FY26. Standalone revenue was minimal at ₹20 lakh, reflecting the holding company structure where most operations are conducted through subsidiaries.

The filing highlighted significant challenges at key subsidiaries. Rajasthan Sun Technique Energy Private Limited (RSTEPL) defaulted on borrowings aggregating ₹2,29,561 lakh and incurred a net loss of ₹3,573 lakh in the quarter. Similarly, Samalkot Power Limited (SMPL) defaulted on ₹1,84,196 lakh in borrowings. A lender for SMPL invoked a corporate guarantee against the parent company and initiated the Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016. SMPL has initiated arbitration against its lender and Citibank N.A., though the London Court of International Arbitration ruled it lacked jurisdiction over SMPL’s claim, leading SMPL to withdraw its arbitration under marketing agreements.

Regulatory and Legal Developments

The company faces multiple regulatory investigations. The Enforcement Directorate (ED) has attached certain assets under the Prevention of Money Laundering Act, 2002, including receivables from Sasan Power Limited and Reliance CleanGen Limited. Additionally, the Central Bureau of Investigation (CBI) conducted search and seizure operations at the registered offices of Reliance Power and Reliance Cleangen Limited concerning transactions with Reliance Commercial Finance Limited and Reliance Home Finance Limited.

Pathak H.D. & Associates LLP, the statutory auditors, qualified their review reports for RSTEPL, SMPL, and Dhursar Solar Power Private Limited (DSPPL) due to material uncertainties regarding going concern assumptions and lack of sufficient audit evidence for asset valuations and receivable recoveries. Despite these qualifications, management maintains that the group can meet liabilities through ordinary business operations and time-bound asset monetization.