Anil Ambani-Led Reliance Power Hits 5% Upper Circuit; Seeks Shareholder Nod for Fundraise

Anil Ambani-led Reliance Power is seeking shareholder nod to raise ₹1,524.60 crore through a preferential issue. The e-voting window for the proposal opened earlier on Tuesday and it will end on October 23, 2024. The result of the postal ballot will be announced on or before October 25.

Reliance Power: Debt Free Company
Reliance Power has been in focus since the day the company declared itself debt free. On September 18, Reliance Power said that it had settled its entire debt obligation of ₹3,872 crore as the guarantor for Vidarbha Industries Power (VIPL).The company settled its disputes with CFM Asset Reconstruction which led to 100% shares of VIPL being pledged in favour of CFM. The full settlement resulted in the release and discharge of the corporate guarantee, undertakings, and all obligations of Reliance Power.

Reliance Power: Turnaround Mode
After the settlement of its debt, Reliance Power is now in the turnaround mode. On September 23, the board of Reliance Power approved raising ₹1,524.60 crore through a preferential issue where promoters will invest ₹600 crore into the company to advance its business.Reliance Infrastructure, the promoter of the company, will enhance its equity stake by over ₹600 crore. The other investors who will participate in the preferential issue include Authum Investment and Infrastructure Ltd and Sanatan Financial Advisory Services.
Preferential Issue Details
According to the postal ballot notice, the company preferential issue will have up to 46.20 crore equity shares and/or warrants convertible into equivalent number of equity shares of the company at a price of Rs 33 per share/warrant.The preferential issue proceeds would be utilised for expansion of business operations directly and/or through investment in subsidiaries and joint ventures, debt reduction and for general corporate purposes, the company has said.The preferential issue will enhance the company's net worth from about Rs 11,155 crore to over Rs 12,680 crore.

Reliance Power Shares Surge
Reliance Power shares have surged on these positive cues. The stock has been gaining for nine straight sessions, hitting 5% upper circuit in more than half of these session. On Tuesday, the stock hit a 52-week high of ₹40.05.