NCLT Mumbai admits insolvency plea against Prime Focus; stock zooms 215% in a year

Prime Focus Ltd, part of the media & entertainment industry, on Thursday informed exchanges that the National Company Law Tribunal (NCLT), Mumbai Bench, admitted a petition filed by Reliance Alpha Services Pvt Ltd, alleging debt of around Rs 353.79 crore.

"Pursuant to Regulation 30 read with Schedule III, Part A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform the Exchanges that vide an oral pronouncement dated 6th May 2026 (which was informed to the Company around 8.18 pm on 6th May 2026), the Hon’ble National Company Law Tribunal (NCLT), Mumbai Bench, has pronounced for admission of a petition filed by Reliance Alpha Services Private Limited (Petitioner) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) against Prime Focus Limited (the Company)," the company stated.

"The Petitioner has alleged a financial debt of Rs 353.79 crores (including interest) under a Loan Agreement executed in 2019," it added.

Prime Focus further said it has already moved the National Company Law Appellate Tribunal (NCLAT) seeking urgent relief against the NCLT order.

"The written order is awaited. Immediately upon the oral pronouncement, appropriate appeal/application before the Hon’ble National Company Law Appellate Tribunal (NCLAT) has already been filed seeking urgent relief, including a stay of the operation of the said order," Prime Focus stated.

The company maintained that no amount was disbursed under the loan agreement and disputed the status of the petitioner as a financial creditor under the Insolvency and Bankruptcy Code (IBC).

"The Company is well within the scope to address and resolve any financial obligation that the Company is expected to. Further, the Company has consistently maintained, and continues to maintain, that no amount was ever disbursed by the Petitioner to the Company under the Loan Agreement in question. Accordingly, the Company's position is that the Petitioner does not qualify as a financial creditor within the meaning of the IBC, and the petition ought not to have been admitted," it further stated.

What is the dispute?

Prime Focus said the matter relates to a BTA signed in 2014 between the company and an affiliate of the petitioner. "The underlying dispute pertains to a Business Transfer Agreement (BTA) entered into in 2014 between the Company and an affiliate of the Petitioner. The amounts claimed under the BTA are actively contested, and the Company has itself instituted a commercial suit before the Hon’ble Bombay High Court for adjudication of the BTA dispute," the company stated.

"The Petitioner appears to be seeking to recover amounts that are the subject of this pending commercial litigation through the IBC mechanism, notwithstanding that no funds were disbursed under the Loan Agreement. The Company is advised that its position on the merits is strong, and it is pursuing all available legal remedies with urgency," it added.

Prime Focus also claimed that its business operations continue in the ordinary course without any disruption.

On the stock-specific front, shares of Prime Focus settled 2.62 per cent higher at Rs 309.15 on Thursday. The stock has rallied 214.82 per cent over the past one year, delivering multibagger returns to investors.

Movie producer Namit Malhotra is a promoter of Prime Focus. Promoters collectively held a 60.77 per cent stake in the company as of March 2026. Namit Malhotra, directly and through Mauritius-based entity A2R Holdings, owned 55.15 per cent stake, while Naresh Mahendranath Malhotra held 5.61 per cent stake.