The National Company Law Tribunal (NCLT) Mumbai Bench has admitted an insolvency petition against media and entertainment firm Prime Focus Ltd. The plea, filed by Reliance Alpha Services Pvt Ltd under Section 7 of the Insolvency and Bankruptcy Code (IBC), alleges a financial debt of approximately Rs 353.79 crore.
NCLT Decision and Company's Immediate Response
Prime Focus informed stock exchanges on Thursday, May 7, 2026, that the NCLT delivered an oral pronouncement on May 6, 2026, admitting the petition. The company stated that the alleged debt, including interest, stems from a Loan Agreement executed in 2019.
In response to the NCLT's decision, Prime Focus has promptly moved the National Company Law Appellate Tribunal (NCLAT) seeking urgent relief, including a stay on the operation of the NCLT order. The company awaits the written order from the NCLT.
Prime Focus Disputes Debt Claim
Prime Focus has consistently maintained that no amount was ever disbursed by the petitioner under the Loan Agreement in question. Consequently, the company argues that Reliance Alpha Services does not qualify as a financial creditor under the IBC, and the petition should not have been admitted.
The underlying dispute, according to Prime Focus, relates to a Business Transfer Agreement (BTA) entered into in 2014 between the company and an affiliate of the petitioner. The amounts claimed under this BTA are actively contested, and Prime Focus has itself initiated a commercial suit before the Bombay High Court for adjudication of the BTA dispute.
The company believes the petitioner is attempting to recover amounts subject to pending commercial litigation through the IBC mechanism, despite no funds being disbursed under the loan agreement. Prime Focus stated it is confident in its legal position and is pursuing all available remedies with urgency. Business operations are reportedly continuing without disruption.
Stock Performance and Promoter Holdings
Despite the insolvency proceedings, shares of Prime Focus have shown remarkable performance, rallying 214.82% over the past year and delivering significant returns to investors. On Thursday, the stock closed 2.62% higher at Rs 309.15.
As of March 2026, promoters held a 60.77% stake in Prime Focus. Movie producer Namit Malhotra, a promoter, directly and through Mauritius-based entity A2R Holdings, owned 55.15% of the shares, while Naresh Mahendranath Malhotra held 5.61%.