Multibagger penny power stock below Rs 10 locked at the upper circuit with 1,81,06,338 bid quantity and landmark legal victory

This multibagger penny stock has delivered a remarkable 112 per cent return over the past year.

The dawn of Samvat 2080 marks a triumphant beginning for D-Street, recording its highest closing since October 20. Amidst the backdrop of this bullish sentiment, India is poised to continue its ascendancy, with markets expected to maintain a robust outperformance. Anticipating a pivotal role for sector rotation in the coming quarters, coupled with an overarching market uptrend, equities are poised to outshine global counterparts amid geopolitical uncertainties and buoyed by robust domestic economic growth.

As the canvas of Samvat 2080 unfolds, key themes of domestic consumption and premiumisation take center stage. Companies are poised for robust earnings growth, supported by margin accretion. Infrastructural and construction plays are set to thrive, aligned with the government's unwavering commitment to infrastructure development. A higher budgetary allocation to rural focus schemes promises to ignite a recovery in rural consumption, especially in light of the imminent budget preceding general elections.

One sector poised for substantial gains is the power sector, riding the wave of increased electrification fueled by initiatives such as Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY), Ujwal DISCOM Assurance Yojana (UDAY), and Integrated Power Development Scheme (IPDS). Notably, the revamped distribution sector scheme (RDSS) introduced in July 2021 aims to transform the electricity distribution sector, representing a significant step towards ensuring quality, reliable, and affordable power for all.

In this electrifying landscape, Rattanindia Power Ltd. emerges as a standout player, capturing attention with its impressive performance. As of the latest update, the stock is trading at an upper circuit limit of 4.49 per cent at Rs 9.30, with a bid quantity of 1,81,06,338 shares, underscoring robust buyer interest. This multibagger penny stock has delivered a remarkable 112 per cent return over the past year.

Delving into the company's success narrative, Rattanindia Power's Amravati power plant has operated seamlessly, fulfilling its commitments under the Power Purchase Agreement (PPA) and recovering 100 per cent of its capacity charges. A landmark Supreme Court judgment in the company's favor in a dispute with MSEDCL has further bolstered its financial position, with MSEDCL having already paid Rs 613.01 crores as of June 30, 2023.

The company's adept legal maneuvering extends to securing a favorable APTEL order, directing the electricity regulatory commission (MERC) to determine the amount payable for reimbursement of coal evacuation charges, alongside interest. The Supreme Court's dismissal of MSEDCL's appeal on April 20, 2023, upholding the APTEL order, adds another layer of legal victory to Rattanindia Power's repertoire.

Underlining its financial prudence, the company has not only met but exceeded its debt obligations, with a repayment of Rs 3,371 Crores (including principal and interest) by June 30, 2023. Post-restructuring, the total secured external debt outstanding (principal) stands reduced to Rs 1,125 Crores.

Noteworthy is the strategic investment interest in Rattanindia Power, with REC and PFC collectively holding a 6.1 per cent stake in the company. As the stock continues to shine below Rs 10, the question beckons – does this thermal power gem find a place in your portfolio? Share your thoughts in the comments section and be part of the conversation shaping Samvat 2080's investment landscape.

Disclaimer: The article is for informational purposes only and not investment advice.