Reliance Power to issue shares to VFSI Holdings at Rs 15.5; stock sinks 10%

Shares of Reliance Power tanked 9.8 per cent intra-day to Rs 19.2 apiece on the BSE in an otherwise firm market on Friday after the company said it would raise funds via private placement of shares. At 10:14 AM, the shares were down 9 per cent at Rs 19.3 as against a 0.5 per cent gain in the benchmark Sensex index.

The company, on Thursday, said that it would raise Rs 933 crore through a private placement of shares to VFSI Holdings, an affiliate of investment firm Varde Partners. This would result in VFSI picking up a 15 per cent stake in the company. READ HERE

Reliance Power said the private placement of shares will happen at Rs 15.55 apiece, which is 27 per cent lower than the company's Thursday's closing price of Rs 21.3 per share.

The announcement comes within days of Reliance Power stating that it would raise upto Rs 1,200 crore from Varde Partners, a global alternative investment firm specialising in credit and credit-related assets.

Reliance Power, is part of the Reliance Group owned by Anil Ambani, and has one of the largest portfolios of power projects in the private sector, based on coal, gas, hydro and renewable energy, with an operating portfolio of 5,945 megawatts.

However, the Reliance group has been struggling under a pile of debts leading to at least four of its companies being dragged to the bankruptcy process by its lenders.

Meanwhile, a report by Institutional Investor Advisory Services (IiAS) had said that the company has defaulted on loans to the tune of Rs 3,561 crore as on March 31, 2022. This was the principal amount, with the interest amount working out to Rs 1,783 crore. Lenders to Reliance Power include Axis Bank, Yes Bank and State Bank of India among others. READ MORE