Reliance Power Shares Hit 52-Week High Ahead of Board’s Game Plan to Raise Funds

Anil Ambani-owned Reliance Power’s shares nosedived by nearly 4 per cent to hit day’s low of Rs 44.68 in the Monday’s morning session. However, the stock recovered the losses to hit a 52-week high of Rs 48.66 as it jumped nearly 5 per cent from Friday’s closing price. 

The stock has surged over 50 per cent in the last one month on the National Stock Exchange (NSE). The stock is in focus ahead of the Anil Ambani-owned company’s board meeting on October 3. 

Reliance Power, which became a zero-debt company on a standalone basis, is planning to raise funds to expand its renewable energy portfolio. The board will decide on a roadmap for raising funds, including the decision whether funds will be raised from domestic or global markets.  

“...The meeting of the board of directors of the company is scheduled on 3/10/2024 to consider and approve raising of long-term resources from domestic and/or lobal markets,” the company said in a statement on BSE on September 27. 

Additionally, the board will discuss whether the funds raised will be by issue of equity shares or equity-linked securities or warrants convertible into equity shares or preferential issues and/or qualified institutional placement, rights issues, or foreign currency convertible bonds, including the issue price of shares. 

Recently, Reliance Power regained investors faith after the company approved issuance of 46.20 crore equity shares and/or warrants worth Rs 1,524.60 crore through preferential allotment on Monday. Promoter Reliance Infrastructure will raise its equity stake by over rS Rs 600 crore. Other two non-promoter entities participating in prefential issue include Authum Investment and Infrastructure Limited and Sanatan Financial Advisory Services Limited. 

The company will use around Rs 803.60 crore to expand its renewable energy portfolio and meet its long-term working capital requirements. 

The move has come just days after Reliance Infrastructure announced plans to raise Rs 6,000 crore. Nearly Rs 3,014 crore will be raised through preferential allotment of shares, under which around 12.56 crore equity shares or convertible warrants will be issued at an issue price of Rs 240 per share. The proceeds from the issue will be allocated to expand business operations, including investments in subsidiaries and joint ventures. After the issue, the net worth of Reliance Infrastructure will increase from Rs 9,000 crore to Rs 12,000 crore with around zero debt. 

Anil Ambani-Owned Companies Revival Plan

The back-to-back announcement of raising funds seems to be a revival plan for Anil Ambani-led Reliance Group. From being ranked sixth-richest in the world in 2008 to facing multiple legal and financial troubles, that led him to announce bankruptcy in a UK court in 2020, Anil Ambani has been through a roller coaster ride in the past decade. 

While his companies are being infused with funds, Anil Ambani was recently banned from the securities market for five years by the securities and exchange board of India (Sebi). Additionally, the regulator has slapped him with a fine of nearly Rs 25 crore on charges of diversion of funds from Reliance Home Finance.