Reliance Power Soars 5% for 9th Straight Day

Reliance Power Ltd’s shares jumped 5 percent during Tuesday’s trading, marking the ninth consecutive day of gains. The stock gained attention after the company announced it would issue 46.20 crore equity shares valued at Rs 1,524.60 crore through a preferential allotment to its promoter, Reliance Infrastructure Ltd, and two non-promoter entities: Authum Investment and Infrastructure Ltd, as well as Sanatan Financial Advisory Services Private Ltd (led by Sanjay Kothari and Meenakshi Sanjay Kothari). This move is part of Reliance Power’s strategy to enhance its renewable energy portfolio.

The issue price has been set at Rs 33, representing a 14 percent discount to the stock’s closing price on Monday. Reliance Power plans to allocate a significant portion of the proceeds, amounting to Rs 803.60 crore, to enhance its presence in the renewable energy sector and explore other new business opportunities, including long-term working capital needs.

As a result of this announcement, the stock reached its 5 percent upper circuit limit at Rs 40.06, marking a 35.48 percent increase over the last nine sessions. So far in 2024, the stock has risen by 67 percent and has seen a 111 percent gain over the past year.

After the allotment, Reliance Infrastructure is expected to own 24.88 percent of the company, while the total shareholding of the promoter group will reach 24.95 percent of the paid-up equity share capital following the issuance of up to 18,31,00,000 equity shares. As of June 30, Reliance Infrastructure held 93,01,04,490 shares, which accounted for 23.15 percent of Reliance Power.

After the allotment of up to 21,82,00,000 equity shares, Authum Investment and Infrastructure is set to own 6.59 percent of Reliance Power’s paid-up equity share capital. As of June 30, this company held 7,67,77,000 shares, representing a 1.91 percent stake in Reliance Power.

Following the allotment, Sanatan Financial Advisory Services Private Ltd will hold a 1.36 percent stake in Reliance Power.

In addition to investments in renewable energy, Reliance Power plans to invest in or provide financial support to its subsidiaries, special purpose vehicles, and joint ventures. A portion of the proceeds from the issue, specifically Rs 340 crore, will also be allocated to convert existing debt from Reliance Infrastructure Ltd, thereby reducing Reliance Power’s overall debt.