Ambani stock engaged in the business of developing, constructing, and operating power projects hits 5 percent upper circuit in the day’s trade after Adani Group in talks to buy its 600 MW thermal power plant.
Price Action
With a market capitalization of Rs. 13,180 Crores, the shares of Reliance Power Limited hit a 5 percent upper circuit at Rs. 32.81 per equity share, from its previous day’s close price of Rs. 31.25.
What Happened
As per the reports Adani Power Limited is in talks with CFM Asset Reconstruction Co to acquire the 600 MW Butibori thermal power project in Nagpur which is owned by Vidarbha Industries Power, a subsidiary of Anil Ambani’s Reliance Power.
CFM Asset Reconstruction Co has acquired all of the Butibori thermal power project loans for ₹1,265 crores and is currently the only creditor to the project.
The projected deal is likely in the range of Rs.2,400-3,000 Crores, translating to Rs. 4-5 crore per MW. The value of the project, which consists of two power plant units, was earlier around Rs. 6,000 crores, but currently, the power generation has stopped so, the valuation is decreased.
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About the Company
Reliance Power Limited is engaged in the business of developing, constructing, and operating power projects across India as well as across borders. It is involved in coal, gas, hydro, wind, and solar-based energy projects. It has close to 6,000 MW of operational power generation assets
Financials and Ratios
Its Revenue from operations grew by 3.6 percent from Rs. 1,922 Crores in Q1FY24 to Rs. 1,992 Crores in Q1FY25, accompanied by decreasing losses of Rs. 296 Crores to Rs. 98 Crores.
In terms of Return ratios, it has reported a return on equity (ROE) of -17.6 percent, and a return on capital employed (ROCE) of 1.43 percent. It has reported a debt-to-equity ratio of 1.62.
Written by: Bharath K.S
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