The rally comes after Reliance Power informed the stock exchanges about its plan to raise long-term resources, both from domestic and global markets
Shares of Anil Ambani-owned Reliance Power have surged over 20 per cent since the company announced its board meeting to consider a fundraising proposal. The board meeting is scheduled for today, September 23, 2024. Ahead of the meeting, Reliance Power stock opened higher and hit a 52-week high of Rs 38.15 per share on the National Stock Exchange (NSE). During the morning session, the stock hit the 5 per cent upper circuit for the fourth consecutive session.
Additionally, the company has recorded gains for eight sessions in a row highlighting strong investor sentiment. The company’s market capitalisation has jumped to Rs 15,328 crore.
The rally comes after the company informed the stock exchanges about its plan to raise long-term resources, both from domestic and global markets.
“A meeting of the Board of Directors of the Company will be held on Monday, September 23, 2024, to consider and approve raising long-term resources by issuing equity shares, equity-linked securities, warrants convertible into equity shares, or other instruments through preferential issue, qualified institutional placement (QIP), rights issue, foreign currency convertible bonds (FCCBs), or other methods,” the company stated.
Last week, the private sector power generation company announced that it has been released and discharged of its corporate guarantee, undertakings and all obligations and claims in relation to the outstanding debt of subsidiary Vidarbha Industries Power Limited (VIPL), amounting to Rs 3,872.04 crore.
The company said it settled all disputes with CFM Asset Reconstruction Company Private Limited, as 100 per cent share of VIPL has been pledged in favour of CFM against the release and discharge of corporate guarantee given by Reliance Power.
In addition, Reliance Power stated that it has participated in a request for selection to set up a 500 MW/1000 MWh Battery Energy Storage System (BESS) that was invited by the Solar Energy Corporation of India (SECI), It added that they are awaiting further communication in this regard.
Reliance Power is involved in establishing and managing power projects and developing coal mines linked to these projects. The company has created a diverse portfolio including power projects and coal mines. Of the power projects within this portfolio, around 5,945 MW have been commissioned, while the remaining projects are in various stages of development.
The Indian government has decided to increase coal-based thermal power capacity by approximately 80 GW by 2031-32 to address the rising power demand in the country.
The renewed thrust on the thermal power capacity addition by the Government of India presents growth opportunities for existing successful thermal power players, Reliance Power said in its FY24 annual report.
In the last one month, Reliance Power shares have given a 10 per cent return. Indicating a strong upward trend, the stock has witnessed substantial gains of 38.22 per cent in the last six months.
On a year-to-date (YTD) basis, Reliance Power shares have jumped by 59.29 per cent and delivered a massive return of 101.32 per cent in the last one year.
Analysts expect further upside in the Anil Ambani-owned stock. Sumeet Bagadia, executive director at Choice Broking says the stock may become highly bullish once it breaches above Rs 40 per share on a decisive basis.
Reliance Power shareholders are advised to hold the scrip while maintaining stop loss at Rs 35 apiece for the short-term target of Rs 45 and Rs 50,” he said.
Bagadia added that fresh investors can also buy Reliance Power shares for the short-term target of Rs 45 and Rs 50, maintaining a strict stop loss at Rs 35.