Shares of Reliance Infrastructure Ltd recorded a significant rise in Monday's trade after the company said it won a Rs 780 crore arbitration case. The stock surged 6.80 per cent to hit a day high of Rs 344.90. It was last seen trading 6.21 per cent up at Rs 343. At this price, the scrip has rallied 67.52 per cent in a month.
Bourses BSE and NSE have put the securities of Reliance Infra under the short-term ASM (Additional Surveillance Measure) framework. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.
Anil Ambani's company has informed bourses that the Calcutta High Court has upheld a Rs 780 crore arbitration award in favour of the company in a dispute with West Bengal-based Damodar Valley Corporation. The company had won a contract to set up a 1,200 MW thermal power plant in Purulia in West Bengal for Rs 3,750 crore.
"This is to inform that on September 27, 2024, the Division Bench of Hon'ble High Court of Calcutta delivered its judgment in a petition filed by Damodar Valley Corporation (DVC) challenging the arbitration award under Section 34, dated September 29, 2023, amounting to approximately Rs 780 crore, including accrued interest in favour of the company concerning the Raghunathpur Thermal Power Project," it stated.
In a separate development, Reliance Infra's board said it would consider raising funds from domestic or global markets on October 1 (Tuesday).
A few analysts largely suggested that the stock looked 'bullish' but 'overbought' on daily charts. Investors with a long-term view can consider holding on to it.
"The stock looked rangebound at current levels. Investors with a long-term view can consider holding on to it," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.
"The pattern analysis on daily timeframes indicates a significant surge in price action following a breakout from the volatility contraction pattern. This pattern suggests a potential increase in smart money participation, reflecting signs of accumulation. We recommend purchasing the stock for a target price of 410, keeping a stop loss at Rs 317," said Kushal Gandhi, Technical Analyst at StoxBox.
"Reliance Infrastructure stock price is bullish but also very overbought on daily charts with next resistance at Rs 373. Investors should book profits at current levels as a daily close below support of Rs 322 could lead to a downward target of Rs 273 in the near term," said Sebi-registered research analyst AR Ramachandran.
RInfra is engaged in the business of providing EPC services, power distribution in Delhi and also in the implementation, operation and maintenance of several projects in defence sector and infrastructural areas such as metro, toll roads and airports. It has also executed the Mumbai Metro Line One project. As of June 2024, promoters held a 16.50 per cent stake in the company.