RInfra approves fundraising of up to Rs 2,930 crore; stock up 62% in a month. Analyst views

Reliance Infrastructure Ltd's board has cleared raising of funds up to $350 million (Rs 2,930 crore) to VFSI Holdings Pte Ltd, an affiliate of global alternative investment firm Värde Investment Partners, LP. "The FCCBs will be unsecured and will have ultra-low cost coupon of 5 per cent p.a. with a long maturity of 10 years. The FCCBs will be convertible into Equity Shares at Rs 330 per share," RInfra stated in a release.

In a separate development, Reliance Infra recently won a Rs 780 crore arbitration case. 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.

On the stock-specific front, shares of RelInfra have seen a massive rise in the past one month. Last checked, the stock settled 1.20 per cent lower at Rs 332.15. At this price, it has rallied 62.22 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.

A few analysts remained positive on the counter. Investors with a long-term view can consider holding on to it, said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.

"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.

Some of them also suggested that the stock may see profit booking. "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.

"One should buy RInfra above Rs 350 level for an upside target of Rs 380. Keep a stop loss at Rs 320. The counter may see some profit booking," said Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking.

RInfra operates in the energy sector handling power distribution in Delhi and energy production. The company is also involved in defence manufacturing. It plays a role in infrastructure development through special purpose vehicles (SPVs), including projects, such as the Mumbai Metro and various airport ventures. As of June 2024, promoters held a 16.50 per cent stake in the company.

Meanwhile, Indian equity benchmarks remained closed on Wednesday to mark Mahatma Gandhi Jayanti. During the previous session, domestic benchmarks settled lower as energy shares dragged. The 30-share BSE Sensex pack shed 33 points or 0.04 per cent to end at 84,266. The broader NSE Nifty index edged down 14 points or 0.05 per cent to close at 25,797. Bourses will resume action tomorrow (Thursday).