Shares of Reliance Power Ltd saw a sharp correction for the second consecutive session in Monday's trade. The stock plunged another 5 per cent to hit its lower circuit limit of Rs 32.73. At this price, it has fallen 14.03 per cent from its recent one-year high value of Rs 38.07, a level seen last week on Friday.
The sharp drop in RPower's share price came after market regulator Sebi restricted industrialist Anil D Ambani and 24 other entities, including former key officials of Reliance Home Finance Ltd, from the securities market for five years over fund diversion from the company.
Securities and Exchange Board of India (Sebi) also imposed a penalty of Rs 25 crore on Anil Ambani and restrained him from being associated with the market including as a director or Key Managerial Personnel (KMP) in any listed company, or any intermediary registered with the market regulator, for 5 years.
RPower has issued a clarification about the regulator's Reliance Home and others. "Reliance Power Ltd was not a noticee or party to the proceedings before Sebi in which the Order is passed. No directions are given in the Order against Reliance Power Ltd. Anil Ambani had resigned from the board of directors of Reliance Power Ltd pursuant to the interim order dated February 11, 2022 passed by Sebi in the same proceedings. Therefore, the order dated August 22, 2024 passed by the Sebi has no bearing whatsoever on the business and affairs of Reliance Power Ltd," it stated.
Prior to this, the counter was buzzing after a few reports suggested that Adani Power had begun talks to acquire a thermal power project in Nagpur once owned by Anil Ambani's bankrupt RPower. However, RPower clarified that it won't comment on media speculations.
On technical setup, support could be seen at Rs 30 level. And, resistance may be found above the Rs 38 range.
"The stock has shown resistance near the 38 range and witnessed profit booking. Near-term support will be at Rs 30.50 where it can consolidate and anticipate another round of upward move. At the same time, a decisive breach below Rs 28.50 can turn the overall bias weak and a further slide can be expected thereafter," said Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher.
"On the lower end, a series of support zones are placed near the Rs 32-30 sub-zone. Resistance could be seen in the Rs 42-45 zone," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.
The expected trading range will be between Rs 40 and Rs 30 for the short term, Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, mentioned.
The counter traded lower than the 5-day and 10-day simple moving averages (SMAs) but higher than the 20-day, 30-, 50-, 100-, 150-day and 200-day SMAs. The stock's 14-day relative strength index (RSI) came at 52.99. A level below 30 is defined as oversold while a value above 70 is considered overbought.
As per BSE, the company's stock has a price-to-equity (P/E) ratio of 203.03 against a price-to-book (P/B) value of 1.47. Earnings per share (EPS) stood at 0.17 with a return on equity (RoE) of 0.73.
The company said its consolidated net loss narrowed to Rs 97.85 crore during the June 2024 quarter (Q1 FY25), on account of improved income. It had reported a loss of Rs 296.31 crore in the April-June period of the preceding 2023-24 financial year. It increased its total income to Rs 2,069.18 crore from Rs 1,951.23 crore in the year-ago period.
As of June 2024, promoters held a 23.24 per cent stake in the firm.