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Reliance Power has approved raising ₹1,524.60 crore through a preferential issue of 46.2 crore equity shares at ₹33 per share. The funds will support business expansion, debt reduction, and corporate growth, increasing the company's net worth.
Reliance Power, a leading power generation company, has announced the approval of a ₹1,524.60 crore equity raising through a preferential issue. This decision, finalised in a board meeting on 23rd September 2024, will involve the issuance of up to 46.2 crore equity shares at ₹33 per share, representing a 13% discount compared to the last traded price of ₹38.15.
This capital-raising initiative is expected to significantly boost Reliance Power’s net worth from ₹11,155 crore to ₹12,680 crore.
The proceeds from this preferential issue will be used to support Reliance Power’s strategic business goals, including expansion efforts, investments in subsidiaries, and joint ventures. The capital will also be utilised to reduce the company’s debt and meet general corporate expenses, which will strengthen the company’s financial stability and growth potential.
Reliance Power's promoter, Reliance Infrastructure, has also committed to increasing its equity stake in the company by over ₹600 crore as part of this equity issue. The placement will also include participation from key investors such as Authum Investment and Infrastructure Ltd and Sanatan Financial Advisory Services Private Ltd.
This step follows Reliance Power’s recent milestone in settling its ₹3,872.04 crore debt linked to Vidarbha Industries Power Ltd, resulting in the company achieving zero debt with banks and financial institutions. Similarly, Reliance Infrastructure has reduced its external debt from ₹3,831 crore to ₹475 crore.
The announcement of the equity raising and debt reduction plans has had a positive impact on Reliance Power’s stock performance. Shares of the company closed 5% higher at ₹38.15 on the day of the announcement. Reliance Infrastructure shares also surged by 5.6%, closing at ₹327.60, reflecting investor confidence in the company’s ongoing efforts to strengthen its financial position.
With this preferential issue, Reliance Power aims to enhance its financial stability while supporting its future business growth. The approval of this equity raising marks a significant step in the company’s strategy to maintain a healthy balance sheet and achieve sustainable growth.
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