Reliance Power to seek board nod to raise funds via equity issuance

Move follows Reliance Infra board approval of Rs 550 cr fund-raising plan on Sunday

Anil Ambani-promoted power generating company Reliance Power would seek the board's nod in the upcoming meeting for raising funds through issuance of equity or equity linked instruments.

The meeting is scheduled for June 13, 2021. The Board of Directors "will consider and approve raising of long-term resources from domestic and/or global markets, inter alia, by issue of equity shares/ equity linked securities/ warrants convertible into equity shares, by way of preferential issue and/ or qualified institutional placement and/or rights issue or any other method including determination of issue price, if any and seeking members'' and other approval(s), as the Board may deem appropriate," the company said in an exhange notice.

The move comes after Reliance Infrastructure's board of directors approved fundraising of Rs 550 crore through issuance of equity and related instruments on Sunday. The company said the funds would be utilised in reducing debt and for future growth.

Reliance Power has operational projects to the tune of 6,000 Mw which includes the 3,960 Mw Sasan ultra mega power project (UMPP) in Madhya Pradesh. The company in a public statement while declaring its annual results for FY 2020-21 said, it has brought down its debt by Rs 3,108 crore during the fiscal.

As on March 31, 2021, the current liabilities of the company including borrowing and financial liabilities stood at Rs 15,928 crore, whereas its total assets amounted to Rs 4,867 crore. The company reported a net profit of Rs 228.7 crore during 2020-21 against a loss of Rs 4,076 crore in the year before.

Scrips of Reliance Power inched up by 0.55 points, closing at Rs 11.55.

Reliance Power has three operational coal-based power projects, one gas-based in India and one under construction in Bangladesh. In the clean energy segment, it has two solar power projects and one wind power project. The company has nine hydro power plants mentioned in its public profile but all are under construction.

One of the solar power plants of the company Rajasthan Sun Technique Energy Pvt Ltd is undergoing debt resolution with its lenders. Its 600 Mw Vidarbha Power (VIPL) is undergoing insolvency proceedings after it was dragged to the NCLT by Axis Bank in 2020.

The company in its financial results said VIPL was in discussion with all its lenders for a resolution outside the Corporate Insolvency Resolution Process (CIRP).