Reliance Power To Raise Over Rs 1,500 Cr Via Preferential Allotment; Shares Up 5%

The stocks of Reliance Power surged 5 per cent in the Tuesday trading session after the energy firm approved in its meeting with the board of directors to raise over Rs 1,500 crore. Reliance Power stock traded at Rs 40.05 with a 4.98 per cent gain in the afternoon session on the National Stock Exchange (NSE).

“Board of Directors at its meeting held today on Monday, 23 September 2024, has approved issuance of up to 46,20,00,000 equity shares and/or warrants convertible into equity shares of the company at an issue price of Rs 33 per share aggregating Rs 1,524.60 crore through preferential allotment,” stated Reliance Power in an exchange filing.

Reliance Infrastructure, the promoter of the company will enhance its equity stake by over Rs 600 crore. The other investors in the preferential Issue are Authum Investment and Infrastructure and Sanatan Financial Advisory Services.

The preferential issue will be made in accordance with the Sebi (issue of capital and disclosure requirements) regulations, 2018 and other applicable laws.

The preferential issue proceeds would be utilised for the expansion of business operations directly and/or through investment in subsidiaries and joint ventures, debt reduction and general corporate purposes.

Preferential issues will also enhance the company's net worth from over Rs 11,155 crore to over Rs 12,680 crore. Further, the listed entity has zero bank debt. The enhanced capital will also support the company's participation in the renewable energy sector. 

Notably, the Board also approved the issuance of a postal ballot to seek shareholders' approval for the preferential issue.