Reliance Power shares in focus as Anil Ambani firm announces Rs 4,200 crore FCCBs 

Multibagger stock: Shares of Reliance Power Ltd are in focus on Friday morning after the Anil Ambani-promoted company said its board has approved the issue of up to $500 million or Rs 4,200 crore worth Foreign Currency Convertible Bonds (FCCBs), on private placement basis, to affiliates of Värde Investment Partners. The FCCBs would have an ultra-low cost interest of 5 per cent per annum. They would be unsecured and have a tenure of 10-year, Reliance Power said.

The FCCBs will be convertible into approximately up to 82.30 crore equity shares of Rs 10/- each of Reliance Power at the conversion price of Rs 51, including a premium of Rs 41 per equity share.

The conversion price is at a premium to the floor price calculated as average of the weekly high and low of the closing prices during the two weeks preceding the relevant date. Each FCCB of $ 1,000,000 equivalent to Rs 4,197.50 crore

"We hereby inform you that the board of directors at its meeting held today i.e., on Thursday, October 03, 2024, has approved inter-alia issue of up to $ 500 million (~INR 4,200 crore) ultra-low cost interest of 5% per annum, unsecured, 10 year long tenure Foreign Currency Convertible Bonds (FCCBs), on private placement basis to affiliates of Värde Investment Partners, LP," Reliance Power said.

The company board also approved the Employee Stock Option Scheme (ESOS), in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, subject to the approval of the members of the company.

Reliance Power shares have soared 73 per cent in the past one month. The stock is up 124 per cent year-to-date and 186 per cent in the past one year.

The stock was recently in news after Reliance Power allotted 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.

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.

Reliance Power recently said it has zero debt from banks and financial institutions and that its networth stood at Rs 11,155 crore on a consolidated basis, as on June 30. This is after it settled all disputes with CFM Asset Reconstruction Private Limited (CFM), as it pledged 100 per cent shares of a subsidiary VIPL against the release and discharge of corporate guarantee it gave earlier.