Reserve Bank of India (RBI) has directed its lead lender IDBI Bank to initiate insolvency proceedings for power and roads builder Lanco Infratech (Lagadapati Amarappa Naidu and Company Infratech) under the Insolvency and Bankruptcy Code (IBC). Following the instruction from the bank, the shares of Lanco hit all time low.

RBI’s internal advisory committee (IAC) had forwarded the listed of 12 accounts to bankers for immediate reference under IBC. The consortium of 27 lenders to Lanco Infratech led by IDBI Bank has initiated insolvency proceeding against the firm which is first among the 12 listed firms.

The market value is at 613 crore rupees of the 25-year-old group controlled by a former Congress MP Lagadapati Rajagopal currently owes 18,000 crore rupees to banks.

The company in its annual report of 2015-16 noted that due to the challenges being faced by the power and infrastructure sectors, the financial performance had taken a toll. Lanco infratech reported a net loss of 813 crore rupees for the quarter ended December 31, 2016.

Lanco Infratech is among 12 firms identified by the central bank with a combined debt of over 1,50,000 crore rupees, a quarter of the total non-performing assets (NPAs), for proceedings IBC 2016.