Shares of Reliance Power, owned by Anil Ambani, have experienced a significant downturn, hitting the 5% lower circuit for the fourth consecutive session. Currently trading at Rs 45.98, the stock is now 16% below its recent 52-week high of Rs 53.64, achieved just last week. This decline follows a remarkable surge of over 60% in the past month, driven by investor enthusiasm after the company announced it had become debt-free.
The recent profit-taking by investors has coincided with broader market pressures, contributing to the stock's downward trajectory. Despite this slump, Reliance Power has shown impressive year-to-date growth of approximately 102%, significantly outperforming the Nifty index, which has returned about 15% during the same timeframe. Over the past year, shares have skyrocketed by 172%, more than doubling investors' initial investments.
Market sentiment improved on September 18 when Reliance Power disclosed it had been released from its corporate guarantee obligations related to a substantial debt of Rs 3,872.04 crore from its subsidiary, Vidarbha Industries Power Limited (VIPL). This announcement was coupled with the resolution of disputes with CFM Asset Reconstruction Private Limited, further bolstering investor confidence.
Additionally, Reliance Power secured a major contract for a 500 MW/1000 MWh battery storage project from the Solar Energy Corporation of India (SECI), positioning itself as a key player in renewable energy initiatives.
While analysts suggest that the stock may be overbought and recommend profit booking at current levels, they also note potential support at Rs 46 and resistance around Rs 50. A decisive close above Rs 50 could lead to further upside opportunities for investors. As Reliance Power navigates this volatile market landscape, stakeholders are advised to monitor developments closely.
