RPower up 5%, hits 7-yr high ahead of board meeting to consider fundraise

Reliance Power shares are quoting higher for the eighth straight trading day, having surged 29 per cent during the period.

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Reliance Power shares hit a seven-year high of Rs 38.16, and froze in the 5 per cent upper circuit on the BSE on Monday’s intra-day trade ahead of the company's board meeting scheduled for today to consider a fundraising proposal.

Till 10:52 AM, a combined 10.25 million shares had changed hands, while there were pending buy orders for a combined 33.88 million shares on the NSE and BSE.

The stock of the power generation company is trading at its highest level since September 2018. It surpassed its previous high of Rs 38.07 that it touched on August 23, 2024.

Reliance Power is quoting higher for the eighth straight trading day, having surged 29 per cent during the period.

Reliance Power, in an exchange filing on Wednesday, September 18, had announced that its board is scheduled to meet on September 23, to consider and approve the fundraise via multiple routes.

“A meeting of the board of directors of the Company will be held on Monday, September 23, 2024, inter alia, to 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 and/or foreign currency convertible bonds or any other method including determination of issue price, if any and seeking members’ and other approval(s), as the Board may deem appropriate,” Reliance Power's exchange filing stated.

The Anil Ambani-led group, of which Reliance Power is also a part, announced last week that it has turned into a nearly zero-debt entity, and it is implementing long-term fund raising plans that are likely to solidify its financial position.

Last week, Reliance Infrastructure's board had approved fund raising of up to Rs 6,000 crore via preferential issue and qualified institutional placement (QIP).

On September 17, Reliance Power announced that the entire obligations of the company as a guarantor on behalf of Vidarbha Industries Power Limited (VIPL) stood fully settled, resulting in the "release and discharge of Corporate Guarantee, Undertakings and all obligations and claims there under in relation to the outstanding debt of VIPL amounting to Rs 3,872.04 crore."

Reliance Power has also settled all disputes with CFM Asset Reconstruction Private Limited (CFM). 100 per cent shares of VIPL were pledged in favour of CFM against the release and discharge of Corporate Guarantee given by Reliance Power.

The company also stated that it has participated in a request for selection to establish a 500 MW/1000 MWh Battery Energy Storage System (BESS) that was invited by the Solar Energy Corporation of India (SECI). It added that they are awaiting further communication in this regard.

Reliance Power is in the business of setting up and operating power projects and development of coal mines associated with such projects. The company has built a portfolio of power projects and coal mines. Of the power projects in its portfolio, the projects aggregating to approximately 5,945 MW are commissioned while the other power projects are under various stages of development.

As per the projections of National Electricity Plan for the period 2022-32, the required coal- and lignite-based installed capacity will be 283 GW by 2031-2032, compared to the present installed capacity of 218 GW.

The Indian government has decided to add new coal-based thermal power capacity of around 80 GW by 2031-32 to meet the increasing power demand in the country. 

Further, India has set ambitious targets for energy transition and plans to have 500 GW of non-fossil based installed capacity by 2030.

The renewed thrust on the thermal power capacity addition by the Government of India presents growth opportunities for existing successful thermal power players, Reliance Power said in its FY24 annual report.