Shares of Reliance Power Ltd surged 5 per cent in Tuesday's trade to take its winning run to the ninth straight session. The stock is in news after Reliance Power said it would allot 46.20 crore equity shares worth Rs 1,524.60 crore via a preferential issue to promoter Reliance Infrastructure Ltd and two non-promoter entities namely Authum Investment and Infrastructure Ltd and Sanatan Financial Advisory Services Private Ltd (Sanjay Kothari and Meenakshi Sanjay Kothari), to expand its renewable energy portfolio.
The issue price is set at Rs 33, which is at a 14 per cent discount to Monday's closing price for the stock. Reliance Power intends to use a substantial portion of the proceeds, Rs 803.60 crore, towards expanding its presence in the renewable energy sector and other new business opportunities, including meeting the long term working capital requirements.
Following the development, the stock hit its 5 per cent upper circuit limit at Rs 40.06. With this, the stock is up 35.48 per cent in nine sessions. The stock is up 67 per cent in 2024 so far and 111 per cent in the past one year.
Post the allotement, Reliance Infrastructure would hold 24.88 per cent and the aggregate shareholding of the promoter group would be 24.95 per cent of the paid-up equity share capital of the company post the allotment of up to 18,31,00,000 equity shares. It owned 93,01,04,490 shares or 23.15 per cent in Reliance Power as on June 30.
Authum Investment and Infrastructure would own 6.59 per cent of the paid-up equity share capital of the company after the allotment of up to 21,82,00,000 equity shares. This company held 7,67,77,000 shares or 1.91 per cent stake in Reliance Power as on June 30.
Sanatan Financial Advisory Services Private Ltd would own 1.36 per cent stake in Reliance Power post the allotment.
Besides RE investments, Reliance Power would also make investment in or provide financial assistance to its subsidiaries, special purpose vehicles and joint ventures. A portion of the issue proceeds (i.e. Rs 340 crore) will also be directed towards conversion of the existing debt availed by the company from Reliance Infrastructure Ltd and thereby reducing Reliance Power's existing debt.