RPower shares hit fresh 52-week high, up 103% in 2024 so far; is it time to exit this mutlibagger?

Shares of Reliance Power Ltd staged a sharp rebound on Monday, extending their strong upward run for the 13th consecutive session. During early trade, the stock slipped 4.62 per cent to hit an intraday low of Rs 44.22. As the session progressed, it surged 10.06 per cent from Rs 44.22 level to scale a new one-year high value of Rs 48.67. At this price, the scrip has gained 61.69 per cent in a month and delivered multibagger returns to investors by rallying 103.22 per cent on a year-to-date (YTD) basis.

The Anil Ambani-led company is scheduled to hold a board meeting on October 3 to consider and approve the raising of long-term resources by issue of equity shares and equity-linked securities or warrants convertible into equity shares.

RPower said it can also consider raising funds via preferential issues and/or qualified institutional placement (QIP). A rights issue or foreign currency convertible bonds or any other method including determination of issue price, if any and seeking members' and other approvals, as the board may deem appropriate, will be on the meeting's agenda.

It recently 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 Pvt Ltd (Sanjay Kothari and Meenakshi Sanjay Kothari), to expand its renewable energy portfolio.

Bourses BSE and NSE have put the securities of RPower 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 technical analysts suggested that investors should consider booking profits at current levels.

Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, said, Investors should not enter at current levels as the risk-reward ratio is not looking good. Those holding can consider booking profits."

Sebi-registered research analyst AR Ramachandran said, "Reliance Power stock price is bullish but also very overbought on daily charts with next resistance at Rs 52. Investors should book profits at current levels as a daily close below support of Rs 43 could lead to a downward target of Rs 35 in the near term."

The counter traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The scrip's 14-day relative strength index (RSI) came at 87.08. A level below 30 is defined as oversold while a value above 70 is considered overbought.

As per BSE, the company's stock has a price-to-equity (P/E) ratio of 273.22 against a price-to-book (P/B) value of 1.98. Earnings per share (EPS) stood at 0.17 with a return on equity (RoE) of 0.73.