Reliance Infra bounces after MERC OKs sale of Mumbai power biz to Adani

Reliance Infrastructure rose 0.67% to Rs 398 at 13:58 IST on BSE, coming off day's low after the company said MERC approved the proposed stake sale of the company's integrated Mumbai power business to Adani Transmission.

The announcement was made during trading hours today, 28 June 2018.

Meanwhile, the S&P BSE Sensex was down 103.53 points, or 0.29% to 35,113.58.

On the BSE, 1.68 lakh shares were traded in the counter so far compared with average daily volumes of 1.73 lakh shares in the past two weeks. The stock had hit a high of Rs 402 and a low of Rs 387.75 so far during the day. The stock hit a 52-week high of Rs 589.80 on 1 January 2018. The stock hit a 52-week low of Rs 375.25 on 16 May 2018.

Maharashtra Electricity Regulatory Commission (MERC) has given its approval to the proposed 100% stake sale of Reliance Infrastructure's integrated Mumbai power business to Adani Transmission. Following the commission's nod, the transaction is expected to be closed in July 2018. MERC had concluded its hearing into the matter and reserved its order on 14 June 2018.

Reliance Infrastructure has already received the approval of Competition Commission of India (CCI) and its share-holders for the deal. Reliance Infrastructure and ATL had signed Definitive Binding Agreement for 100% stake sale of the integrated business of generation, transmission and distribution of power for Mumbai in December 2017. The total consideration value of the deal is estimated at Rs 18800 crore.

Reliance Infrastructure will utilize the proceeds of this transformative transaction entirely to reduce its debt, becoming debt free and up to Rs 3000 crore cash surplus. This is the largest ever debt reducing exercise by any corporate. This monetization is a major step in Reliance Infrastructure deleveraging strategy for future growth.

Reliance Infrastructure Mumbai Power business (known as Reliance Energy) is India's largest private sector integrated power utility distributing power to nearly 3 million residential, industrial and commercial consumers in the suburbs of Mumbai, covering an area of 400 square km. It caters to a peak demand of over 1,800 MW, with annual revenues of Rs 7500 crore with stable cash flows. Going forward, Reliance Infrastructure will focus on upcoming opportunities in asset light EPC and Defence businesses.

On a consolidated basis, net profit of Reliance Infrastructure rose 291.35% to Rs 160.14 crore on 3.34% rise in net sales to Rs 5076.04 crore in Q4 March over Q4 March 2017.

Reliance Infrastructure is one of the largest infrastructure companies, developing projects through various special purpose vehicles (SPVs) in several high growth sectors such as power, roads and metro rail in the Infrastructure space and the defence sector.

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