Anil Ambani-backed infrastructure stock hit a 52-week high, surging nearly 13 percent after announcing a Rs.3,000 crore preferential issue via Qualified Institutional Placement (QIP), with plans to issue up to 12.56 crore equity shares through preferential allotment.
Share Price Movement
In Friday’s trading session, Reliance Infrastructure Ltd’s shares hit a 52-week high of Rs.320 per share, up 12.4 percent from the previous closing of Rs.284.75 apiece. The share has since retreated and is trading at Rs.310 per share.
What led to the rise
On 19th September, the board of Reliance Infrastructure approved plans to seek shareholder approval for raising Rs.3,000 crore via a Qualified Institutional Placement (QIP).
The board approved raising Rs.3,014.4 crore through a preferential issue of up to 12.56 crore equity shares at Rs.240 per share.
The proceeds will be used to expand the company’s operations, either directly or through investments in subsidiaries and joint ventures, and to meet long-term working capital needs and general corporate purposes.
The preferential issue will be offered to the promoter group entity Risee Infinity Private Limited, as well as non-promoter entities Florintree Innovation LLP and Fortune Financial & Equities Services Private Limited.
Promoter and Key Investors to Participate
Former Blackstone executive Mathew Cyriac, through Florintree Innovation, and equity investor Nimish Shah, via Fortune Financial & Equities Services, will invest Rs.1,200 crore for a minority stake in the company.
Anil Ambani’s Risee Infinity, currently holding a 16 percent stake in Reliance Infrastructure, will contribute the remaining Rs.1,814 crore, further increasing the promoter’s equity stake.
Significant Debt Reduction
Reliance Infrastructure has made significant progress in reducing its standalone external debt, lowering it from Rs.3,831 crore to Rs.475 crore.
The company explained that Invent Assets Securitisation and Reconstruction Pvt. Ltd., one of its lenders, has transferred certain secured assets to recover its dues. This transfer process, known as novation, involves moving the securities to a clearing house, which will manage the sale to buyers.
Financial Performance
According to Reliance Infrastructure’s latest financial update, revenue increased by 30 percent to Rs.7,193 crore in Q1 FY25 from Rs.5,165 per share in Q1 FY24. The company’s net loss was reduced to Rs.93 crore, from Rs.567 crore in the same period.
Company Profile
Reliance Infrastructure Ltd is a key player in India’s infrastructure sector, with a strong focus on power generation, transmission, and urban infrastructure development, and a significant presence in Mumbai and Delhi.
Written by – Siddesh S Raskar
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