The State Bank of India has asked Reliance Industries to complete its proposed takeover of Alok Industries and pay the Rs 500 crore equity component in its takeover of the bankrupt textile company.

The Reliance-JM Financial Asset Reconstruction consortium won the right to buy Alok Industries in the Insolvency and Bankruptcy Code (IBC) process in March last year. Reliance wants to raise about Rs 4,550 crores through bank loans while infusing a Rs 500 crore equity in the company. State Bank wants to make sure that at least the equity component comes in so that it has some surety. The bank is hoping that Reliance at least deposits the equity component in the interim, which will help it proceed with the paper work for the transaction simultaneously as the loan gets sanctioned. SBI, the lead bank, had initiated insolvency proceedings against Alok Industries in June 2017. It was among the 12 accounts with outstanding loans greater than Rs 5,000 crores.

Silvassa-based Alok Industries is a fully integrated textile company with a presence in the cotton and polyester segments. The company owes lenders a total of Rs 30,000 crores, which means banks are taking a collective haircut of 83 per cent. The majority of the Rs 30,000-crore dues are to financial creditors, with the company owing Rs 624 crores to operational creditors.