Reliance Power to raise Rs 1,525 crore through preferential issue

Parent entity Reliance Infrastructure to increase equity in R-Power by Rs 600 crore

Anil Ambani-promoted Reliance Power (R-Power) on Monday announced that the company’s board has approved a preferential issue of equity shares worth Rs 1,525 crore, aimed at strengthening its renewable energy business and boosting its balance sheet.

The issue entails up to 46.20 crore equity shares or warrants convertible into equity shares at a price of Rs 33 per share, according to the company’s press release.

Parent company Reliance Infrastructure will increase its equity stake in R-Power by over Rs 600 crore. Non-promoter investors include Authum Investment and Infrastructure and Sanatan Financial Advisory Services.

Last week, Reliance Infrastructure, the parent company of R-Power, announced plans to raise Rs 6,000 crore through a combination of a qualified institutional placement and preferential issue.

The energy company has outlined its plans to use the proceeds from this issuance to fund expansion efforts, both directly and through subsidiaries and joint ventures. The capital raised will also be used for reducing existing debt and for general corporate purposes, the company said.

R-Power said the move is set to bolster the company’s net worth, increasing it from Rs 11,155 crore to over Rs 12,680 crore, as it aims to diversify its portfolio and pursue growth opportunities in the energy sector.

Last week, the company had announced that it had fully settled its Rs 3,872 crore obligation as guarantor for Vidarbha Industries Power, resulting in the complete release and discharge of the corporate guarantee, undertakings, and all obligations tied to the outstanding debt.

As the company shifts focus towards renewable energy, this capital infusion is expected to provide the necessary support for its foray into the sector, positioning Reliance Power as a stronger player in India's evolving energy landscape, according to the press release.

The company said it has a portfolio of power projects across coal, gas, and renewable energy, with a commissioned portfolio of 5,300 megawatts.

Reliance Power’s shares closed at Rs 38.16 per share, up 4.98 per cent, while the benchmark Sensex was higher by 0.45 per cent at 84,928.61 points.