Reliance Naval: Anil Ambani's Rs 2,082 crore shipyard bet ended in a 17% recovery

Pipavav Shipyard in Gujarat was billed as India's largest private shipyard when Anil Ambani's Reliance Infrastructure bought control in January 2016 for up to Rs 2,082 crore: 18 per cent from founder Nikhil Gandhi's promoter group at Rs 63 a share, plus a Rs 1,263 crore open offer at Rs 66. Ambani framed it as Reliance Group's entry into naval and commercial shipbuilding under the Make-in-India push, and the company was renamed Reliance Naval and Engineering. The order book never matched the vision.

Debt mounted, and in January 2020 the NCLT admitted IDBI Bank's insolvency petition after the company defaulted on Rs 1,160 crore owed to that bank alone. Creditors eventually filed claims of Rs 46,441 crore, of which Rs 12,884 crore were admitted. In December 2022 the tribunal approved a Rs 2,108 crore plan from Swan Energy and Hazel Mercantile through SPV Hazel Infra: secured lenders would receive Rs 2,040 crore on Rs 11,858 crore of admitted claims, roughly 17 paise per rupee, and unsecured creditors nothing.

Then the winner stalled. The plan required an upfront payment of roughly Rs 293 crore by March 2023, but the consortium sought extensions, at one point blaming the Adani-Hindenburg market turmoil for drying up its funding. It paid about Rs 50 crore only after the tribunal pressed, and on 8 October 2023 the NCLT ordered a Rs 250 crore deposit before it would hear any more extension pleas. The remaining upfront sum of Rs 231.42 crore landed weeks later, and management control passed to Swan only on 4 January 2024, nearly a year after plan approval.

Secured lenders got Rs 2,040 crore on Rs 11,858 crore admitted claims, about 17 paise per rupee; unsecured creditors got zero; shareholders took 1:275 dilution

Reliance paid up to Rs 2,082 crore for a capital-hungry yard whose revenue depended on naval and energy orders that never arrived at scale.

The acquisition sat on an already strained group balance sheet, so a single Rs 1,160 crore default to one bank dragged the entire yard into insolvency.

The committee of creditors chose a Rs 2,108 crore plan whose cash schedule the winner could not fund, trading a headline number for months of paralysis.

India's insolvency code offers no strong remedy when the resolution applicant itself delays; the tribunal could only order deposits and grant extension after extension.

A winning bid is only as good as its funding. After approval the buyer controls the clock, so a cash-poor acquirer can stall creditor recoveries for a year. Test payment capacity, not just bid size.

Swan paid the second tranche of Rs 331.07 crore before a due date of 23 December 2024, itself a payment the tribunal had already extended by a year with interest. The company was renamed Swan Defence and Heavy Industries and relisted on 20 January 2025 at Rs 35.99 a share, with old shareholders receiving one new share for every 275 held. Swan says it is rebuilding the yard's fabrication capacity for naval, energy and commercial work. For creditors, the real recovery stayed close to the 17 paise per rupee the plan offered, delivered two years late.