Here's why Anil Ambani's Reliance Power shares hitting upper circuit
The company’s shares have surged by 122 per cent since the past year, climbing from Rs 18.95 to over Rs 42.05.
Anil Ambani has been in the news for the past few weeks for several reasons. Recently, his Reliance Infrastructure Ltd reduced its Rs 3831 crore debt by 87 per cent to Rs 475 crore. Later, Reliance Power announced that it had become a debt-free company. Ever since the news came in, shares of the company have hit the upper circuit. Even on Wednesday, the shares saw a nearly 5 per cent gain and closed at Rs 42.05. The company’s shares have surged by 122 per cent since the past year, climbing from Rs 18.95 to over Rs 42.05. The market cap of the company reached Rs 16891 crore on September 25.
This growth has mainly been driven by the company’s big decision to become debt-free. This has made investors invest in the company. The transformation of Reliance Power began in December last year when it started repaying its massive debts. By March 2024, it had repaid loans amounting to Rs 1,023 crore, then Rs 800 crore in August. Most recently, the company settled a Rs 3,872 crore loan with banks, giving it a debt-free status.
Reliance Power's board approved the preferential issue on Monday, with over Rs 600 crore coming from its promoter company, Reliance Infrastructure, and the remaining Rs 900 crore from Authum Investment and Infrastructure Ltd and Sanatan Financial Advisory Services. This preferential issue is expected to boost Reliance Power's net worth from Rs 11,155 crore to over Rs 12,680 crore, maintaining its zero-bank-debt status, according to company stock marketing filing. The proceeds will be used to expand business operations, either directly or through investments in its subsidiaries.