SITI Networks Discloses ₹1,206 Crore Default to Eight Lenders

Introduction

SITI Networks Limited, a company currently undergoing insolvency proceedings, has formally disclosed a significant default on its loan obligations. In a regulatory filing dated March 2, 2026, the company reported a failure to meet loan and interest payments amounting to ₹1,206.03 crore as of January 31, 2026. This disclosure, mandated by the Securities and Exchange Board of India (SEBI), highlights the severe financial distress of the company, which has been under a Corporate Insolvency Resolution Process (CIRP) since early 2023.

Details of the Default

The default pertains to term loan installments and interest payments that have remained unpaid for over 30 days, triggering the mandatory reporting requirement. The financial obligations are spread across a consortium of eight lenders, including major banks and asset reconstruction companies. The company's inability to service its debt underscores the operational and financial paralysis it faces while under the supervision of a Resolution Professional.

Affected Financial Institutions

The total outstanding claims from financial creditors have been a key point in the insolvency proceedings. The default impacts a wide range of institutions. The claims submitted by these lenders have been documented at different stages of the CIRP, reflecting the evolving nature of the liabilities.

The Path to Insolvency

SITI Networks' financial troubles culminated in the initiation of the CIRP by the Mumbai Bench of the National Company Law Tribunal (NCLT) on February 22, 2023. Following the NCLT's order, Mr. Rohit Mehra was appointed as the Interim Resolution Professional (IRP). As per the Insolvency and Bankruptcy Code (IBC), the powers of the company's Board of Directors were suspended and vested in the IRP, who now manages the company's affairs.

A Complicated Legal Journey

The insolvency process has been marked by a series of complex legal challenges that have escalated through India's judicial system. An initial appeal against the NCLT's admission order was dismissed by the National Company Law Appellate Tribunal (NCLAT), which reinstated the CIRP. Subsequent NCLAT judgments directed financial creditors to return funds they had received during a stay period, a decision that was promptly challenged.

Several financial creditors have since taken their appeals to the Supreme Court of India. The apex court has granted an interim stay on the NCLAT's directive, preventing creditors from having to remit the amounts. The Supreme Court also directed that no payments be made to operational creditors for liabilities related to the stay period, adding another layer of complexity to the resolution process.

Notable Transactions During Insolvency

A significant development during the CIRP was the assignment of a financial creditor claim from Zee Entertainment Enterprise Limited (ZEEL) to Vani Agencies Private Limited (VAPL) on July 2, 2024. After verification, the Resolution Professional admitted VAPL's claim. Notably, VAPL has been classified as a related party under the IBC, a detail that can have implications for its role and rights within the Committee of Creditors.

Underlying Financial Strain

The loan default is a symptom of deeper financial issues. For the quarter ended June 30, 2025, SITI Networks reported a standalone net loss of ₹43.76 crore (₹437.64 million). The company's financial statements revealed a negative net worth of ₹1,338.04 crore and a negative working capital of ₹1,727.89 crore, painting a grim picture of its financial health. These persistent losses and liabilities have made it impossible for the company to meet its debt obligations.

Outlook and Risks

The future of SITI Networks is entirely dependent on the outcome of the CIRP and the ongoing Supreme Court proceedings. The primary risk for all stakeholders is the potential for liquidation if a viable resolution plan is not formulated and approved by the Committee of Creditors and the NCLT. The legal delays and the contentious nature of the proceedings further cloud the outlook, creating prolonged uncertainty for investors, employees, and creditors. The company's ability to continue as a going concern hangs in the balance, awaiting a final resolution from the legal and insolvency framework.