Reliance Power disclosed a provisional seizure order by the Enforcement Directorate involving Rs 2,032.81 crore in assets, including shares of its subsidiary Sasan Power. The action stems from alleged FEMA violations linked to 2006-2008 transactions. Reliance Power has formally disputed the order, noting that the seized shares are already pledged to Power Finance Corporation.
Reliance Power Assets Seized by Enforcement Directorate
Total value of seized assets: Rs 2,032.81 crore.
Shares of Sasan Power Limited and bank balances affected by provisional seizure.
Reader Takeaway: Provisional seizure of pledged assets creates immediate legal uncertainty for Reliance Power’s ongoing debt arrangements.
What just happened
Reliance Power Limited has received an order of provisional seizure from the Enforcement Directorate dated October 12, 2026. The authority has frozen shares of Sasan Power Limited, a wholly owned subsidiary, valued at Rs 2,026.65 crore, along with Rs 6.16 crore in company bank balances. The order falls under Section 37A of the Foreign Exchange Management Act (FEMA), 1999, citing alleged contraventions related to historical transactions.
Why this matters
The seizure restricts the company’s ability to sell, pledge, or transfer these assets. The most critical concern for investors is the status of Sasan Power Limited shares, which serve as collateral for financing from Power Finance Corporation Limited. Because these assets are already encumbered, the enforcement action adds legal complexity to the company’s existing security arrangements with state-owned lenders.
The backstory
The Enforcement Directorate’s action is linked to foreign currency convertible bonds issued by the company in 2006 and overseas investments made in a Singapore subsidiary in 2008. The authorities allege these transactions violated Section 4 of FEMA. These events date back nearly two decades, raising questions regarding the timing of the regulatory probe.
Company Stance
Reliance Power has formally disputed the findings. The company maintains that its 2008 overseas investments were executed with all requisite regulatory approvals at the time. Management has stated that it is assessing the legal implications and intends to pursue appropriate legal channels to protect shareholder interests. No financial penalty has been levied at this time.
Risks to watch
Investors should monitor the confirmation process by the Competent Authority. A sustained seizure could impact the company's financial flexibility, given that the underlying asset is a major subsidiary already linked to significant government-backed debt. The ongoing legal battle will likely introduce volatility in the stock price as the market assesses the threat to operational stability.