Anil Ambani-backed stocks in the infrastructure and power transmission sectors are drawing attention in Wednesday’s trading session. After clearing substantial debt, these stocks have surged over 5 percent and hit the upper circuit limit, reflecting strong investor confidence and renewed interest.
Share Price Movement
In Wednesday’s trading session, Reliance Power Ltd’s shares reached the 5 percent upper price band, trading at Rs.32.98 per share, up from Rs.31.41. Similarly, Reliance Infrastructure Ltd’s shares surged by 8 percent to Rs.254.4 per share, from Rs.235.65, and are currently trading at Rs.247.35 per share.
What led to the rise
Reliance Power Ltd’s shares saw a significant increase on September 18 after the company announced it had settled its Rs.3,872 crore guarantee for its subsidiary, Vidarbha Industries Power Ltd. This settlement has resulted in the release and discharge of the corporate guarantee, undertakings, and all related obligations.
The company has also resolved all disputes with CFM Asset Reconstruction. In return for the release of the corporate guarantee, Reliance Power has pledged 100 percent of VIPL’s shares in favour of CFM.
Additionally, Reliance Power announced that it has eliminated all its debt from banks and financial institutions. As of the end of the first quarter in FY25, the company’s consolidated net worth stands at Rs.11,155 crore.
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Similarly, Reliance Infrastructure Ltd., a member of the Anil Ambani Group, has announced that its standalone external debt has been reduced to Rs.475 crore from Rs.3,831 crore previously.
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 then handle the sale to buyers.
As a result, the entire fund-based outstanding amount with Invent ARC has been reduced to zero. Furthermore, Reliance Infra has cleared its outstanding dues to Life Insurance Corporation of India (LIC), Edelweiss ARC, ICICI Bank, Union Bank, and other lenders, according to the exchange filing. Following these settlements, the company’s net worth now stands at Rs. 9,041 crore.
Order Book
As of FY24, Reliance Power has developed a portfolio of power projects and coal mines. Of the power projects, approximately 5,945 MW have been commissioned, with the remaining projects at various stages of development.
As of FY24, Reliance Infrastructure’s Engineering and Construction (E&C) Division has an order book valued at Rs.1,974.64 crore (USD 237 million) with major projects in the pipeline.
Recent updates
On August 22, the Securities and Exchange Board of India (SEBI) imposed a five-year ban on promoter Anil Ambani from participating in the securities market. SEBI also levied a Rs. 25 crore penalty against him.
The ban restricts Ambani from holding any roles as a director or key managerial personnel (KMP) in listed companies or intermediaries registered with the regulator. In response to the order, Reliance Power issued a clarification regarding SEBI’s decision.
Financial Performance
According to Reliance Power’s latest financial update, revenue increased by 4 percent to Rs.1,992 crore, while the net loss decreased to Rs.98 crore compared to the same quarter last year.
For Q1 FY25, Reliance Infrastructure Ltd reported a 30 percent revenue rise to Rs.7,193 crore. The company’s net loss was Rs.93 crore, reduced from the same quarter a year ago.
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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. Reliance Power, also part of the Reliance Group, specialises in the development and operation of power projects across various fuel types and locations.
Written by – Siddesh S Raskar
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