Reliance Group-Backed & Anil Ambani-Owned power multibagger stock at Rs 42.06 hits upper circuit & 52-week high as Board approves preferential issue of equity shares of Rs 1,525 crore
The stock gave multibagger returns of over 170 per cent from its 52-week low of Rs 15.53 whereas BSE Sensex Index is up by 29 per cent in the same period.
Reliance Power Ltd.'s Strategic Move: A Boost to Net Worth and Renewable Energy Ambitions
Reliance Power, a prominent player in India's power generation sector, has taken a significant step towards strengthening its financial position and accelerating its growth in the renewable energy space. The company's Board of Directors has approved a preferential issue of equity shares worth Rs 1525 crore, a move aimed at enhancing its net worth and supporting its participation in the renewable energy sector.
The preferential issue is expected to boost Reliance Power's net worth from over Rs 11,155 crore to over Rs 12,680 crore. Importantly, the company remains debt-free, a testament to its prudent financial management. The infusion of additional capital will provide the necessary resources to invest in renewable energy projects, a strategic focus for the company.
Reliance Infrastructure Limited, the promoter of Reliance Power, will enhance its equity stake by over Rs 600 crore through this preferential issue. This demonstrates the promoter's continued commitment to the company's growth and success.
The proceeds from the preferential issue will be utilized for various purposes, including expansion of business operations, investment in subsidiaries and joint ventures, debt reduction, and general corporate purposes. This strategic allocation of funds will enable Reliance Power to capitalize on growth opportunities and strengthen its market position. This democratic process ensures that their interests are represented and considered before proceeding with the capital raise.
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In addition to the preferential issue, Reliance Power has made significant strides in resolving its financial obligations. The company has fully settled its corporate guarantee to the lenders of Vidarbha Industries Power Limited, amounting to Rs 3,872.04 crore. This settlement has resulted in the release and discharge of all related obligations and claims.
Moreover, Reliance Power has resolved all disputes with CFM Asset Reconstruction Private Limited. This resolution has paved the way for the release and discharge of the corporate guarantee provided by Reliance Power in exchange for 100 per cent of the shares of Vidarbha Industries Power Limited.
These developments have significantly improved Reliance Power's financial health and positioned it for future growth. The company's shares have been on a strong upward trajectory, reflecting investor confidence in its strategic direction and financial performance.
The company has a market cap of Rs 16, 895 crore. The stock gave multibagger returns of over 170 per cent from its 52-week low of Rs 15.53 whereas BSE Sensex Index is up by 29 per cent in the same period. Investors should keep an eye on this Small-Cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.