Shares of Reliance Power hits 5% upper circuit at Rs 40.05 on Tuesday morning after the Anil Ambani-led company announced a preferential issue of 46.2 crore equity shares valued at Rs 1,524.60 crore. The shares will be issued at a price of Rs 33 per share, reflecting a 14% discount compared to Monday’s closing price.
Preferential Issue Details of Reliance Power
The preferential issue is set to be offered to the company’s promoter Reliance Infrastructure Ltd, along with non-promoter entities Authum Investment and Infrastructure Ltd and Sanatan Financial Advisory Services Private Ltd, owned by Sanjay Kothari and Meenakshi Sanjay Kothari.
Post the allotment, Reliance Infrastructure will hold a 24.88% stake in Reliance Power, with the overall promoter group’s shareholding increasing to 24.95%. This will come after the allotment of up to 18.31 crore equity shares. As of June 30, Reliance Infrastructure owned 23.15% or 93,01,04,490 shares in Reliance Power.
Authum Investment and Infrastructure, which held a 1.91% stake (7,67,77,000 shares) as of June 30, will increase its stake to 6.59% post-allotment of up to 21.82 crore equity shares. Sanatan Financial Advisory Services will own a 1.36% stake in Reliance Power following the allotment.
For What Purpose The Fund Will Be Used?
Reliance Power stated that it is currently zero bank debt on a standalone basis and is looking forward to expanding its operations. The company is especially focused on increasing its presence in the renewable energy sector, both directly and through special purpose vehicles and subsidiaries.
The fresh capital raised through this preferential issue will be utilized to enhance long-term resources, improve net worth, reduce existing debt, and ensure the company’s long-term viability and growth. Additionally, the proceeds will support Reliance Power’s working capital requirements and overall corporate purposes, aiming to enhance shareholder value.
Allocation of Proceeds
Out of the total proceeds, Rs 803.60 crore will be specifically directed toward expanding its presence in the renewable energy sector and exploring new business opportunities, including addressing long-term working capital needs.
Furthermore, up to 25% of the issue’s proceeds will be allocated for general corporate purposes, such as meeting operational expenses, addressing corporate exigencies, and managing contingencies. Reliance Power also emphasized that these funds may be used to improve its financial health, bolster net worth, and reduce debt, ensuring long-term growth and stability.
Reliance Power Stock Performance in Last One Year
Reliance Power shares have shown strong performance across various time frames, delivering positive returns. Over the past month, the stock has risen by 10.64%, reflecting its stability and growth potential. In the last six months, it has surged by an impressive 38.22%, indicating a robust upward trend.
Year-to-date, Reliance Power shares have jumped 59.29%, highlighting the stock’s continued momentum during the current fiscal year. Over the past twelve months, the stock has delivered a remarkable return of 101.32%, underscoring its sustained growth and appeal to investors.
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