Reliance Group-backed multibagger penny stock at Rs 28.67 was locked in upper circuit as the company becomes debt-free on a standalone basis!

The stock gave multibagger returns of 108 per cent from its 52-week low of Rs 13.80 whereas BSE Sensex Index is up by 18.15 per cent in the same period.

Anil Ambani owned Reliance Power Ltd, on Tuesday, the stock opened at Rs 27.62 per share on the BSE and reached an intraday high of Rs 28.67, getting locked at 10 per cent upper circuit with a spurt in volume by more than 3.34 times on BSE. This positive movement is largely due to the company becoming debt-free on a standalone basis after repaying approximately Rs 800 crore in outstanding dues to lenders. Between December 2023 and March 2024, Reliance Power signed multiple debt settlement agreements with banks such as IDBI Bank, ICICI Bank, Axis Bank, and DBS, and successfully cleared its debts.

To achieve this, Reliance Power sold the development rights for its proposed 1,200 MW hydroelectric project in Arunachal Pradesh to THDC for Rs 128 crore in December 2023. Additionally, in March 2024, the company sold its 45 MW wind energy project in Vashpet, Maharashtra to JSW Renewable Energy for Rs 132 crore. The proceeds from these sales were used to retire the company's debt, allowing Reliance Power to strengthen its financial position and regain investor confidence.

With a market cap of over Rs 11,500 crore and 38.7 lakh retail investors, Reliance Power operates a total capacity of 5,900 MW. This includes the 3,960 MW Sasan Ultra Mega Power Project (UMPP) and the 1,200 MW Rosa Thermal Power Plant in Uttar Pradesh. The Sasan UMPP is one of the largest integrated coal-based power plants in the world, showcasing Reliance Power's significant contribution to India's energy sector.

Also Read: 10:1 Stock Split & Promoters bought 40,12,867 shares: Board allots 2,00,000 shares to the FII and 50,000 shares to non-promoters on conversion of warrants!

The company's debt-free status and enhanced operational efficiency have attracted positive attention from investors. Furthermore, Reliance Power is expected to benefit from favourable energy policies under the newly formed Modi 3.0 cabinet.

Reliance Power Ltd is a company in India that builds and runs power plants, both within the country and abroad. They own a large collection of operational plants and have additional projects still in development. This includes facilities that use coal, natural gas, hydropower, wind, and solar power.

In March 2024, Reliance Power saw a significant increase in holdings by both Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs). FIIs nearly doubled their stake, acquiring an additional 5.66 per cent for a total ownership of 13.01 per cent while DIIs bought an additional 1.77 per cent to increase their stake to 4.94 per cent. This represents a considerable rise from their holdings in March 2023, which were 7.35 per cent and 3.17 per cent respectively. The stock gave multibagger returns of 108 per cent from its 52-week low of Rs 13.80 whereas BSE Sensex Index is up by 18.15 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.