Shares of Reliance Infrastructure rose 12% in early deals today after the firm said its board has approved raising of Rs 3,014.4 crore through a preferential issue of up to 12.56 crore equity shares at an issue price of Rs 240 apiece. With today's rally, the stock has surged 50% in a week.
The board also approved seeking enabling authorisation from the shareholders to raise up to Rs 3,000 crore by making a Qualified Institutional Placement (QIP).
Shares of Reliance Infrastructure zoomed 12.37% to a fresh 52 week high of Rs 320 on BSE. Market cap of the firm stood at Rs 12,622 crore. Later, the stock ended 11.13% higher at Rs 316.45 on BSE.
Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi sees Support at Rs 265 and resistance at Rs 308. The stock can reach Rs 320 mark post a decisive close above Rs 308 level.
The stock is expected to trade in a range between Rs 255 and Rs 320 in the short term, said Patel.
Kushal Gandhi, Technical Analyst, StoxBox said, "The price movement of Reliance Infrastructure has experienced a significant increase of approximately 65% over the past 13 trading sessions, accompanied by higher trading volumes and increased momentum. This surge in momentum has resulted in a breakout from the rounding bottom pattern. Currently, the relative strength index indicates an extreme overbought condition, with the price trading more than 35% above the mean levels. This suggests a potential for minor profit-taking. We advise committed investors to maintain their investment positions, with a target price of Rs 350 and a recommended stop loss near Rs 277."
AR Ramachandran, an independent SEBI registered analyst said, "Reliance Infrastructure stock price is bullish but also overbought on the Daily charts with next resistance at 304. Investors are advised to keep booking profits as a Daily close below support of 279 could lead to target of 214 in the near term."
The preferential issue proceeds will be utilised for Expansion of Business Operations directly and/or through investment in subsidiaries and joint ventures including meeting the long-term working capital requirements and for general corporate purposes.
The Reliance Infrastructure stock has a negative PE ratio of -7.11 and a price to book ratio of 1.79. Earnings per share of the stock is negative at -40.04. Return on equity is also negative at -25.15, according to the BSE website.
Reliance Infrastructure shares have a one-year beta of 1.3, indicating high volatility during the period. In terms of technicals, the relative strength index (RSI) of Reliance Infrastructure stands at 77.2, signaling it's trading neither in the overbought nor in the oversold zone. Reliance Infrastructure shares are trading higher than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.
The preferential issue will be made to promoter group entity Risee Infinity Private Limited and other non-promoter entities Florintree Innovation LLP, Fortune Financial & Equities Services Private Limited, the company said in a regulatory filing, adding that the issue will result in enhancing the promoter’s equity stake.
Earlier this week, the Anil Ambani-led firm said it has reduced its standalone external debt from Rs 3,831 crore to Rs 475 crore. Consequently, the net worth of the company will stand at Rs 9,041 crore.
"Invent Assets Securitisation and Reconstruction Private Limited, a lender to the company, has novated certain charged securities to recover its dues. As a result, Invent ARC's entire fund based outstanding amount has been reduced to zero. Additionally, Reliance Infra has cleared its funded outstanding dues to Life Insurance Corporation of India, Edelweiss Asset Reconstruction Company Limited, ICICI Bank, Union Bank, and other lenders," said Reliance Infra in a communication to bourses.