Reliance Infrastructure Ltd saw its shares surge by 6% in early trading on Wednesday after the company announced the successful settlement of dues with Edelweiss Asset Reconstruction Company Limited (Edelweiss). This significant development boosted investor confidence, as the company fully repaid its obligations tied to Non-Convertible Debentures (NCDs), totalling ₹235 crore. The share price rise offers a potential opportunity for those looking to invest in stocks.
Share price performance
On Wednesday, Reliance Infrastructure's stock opened at ₹244 on the Bombay Stock Exchange (BSE), up from the previous day’s close of ₹235.65. The shares continued to gain momentum, reaching a high of ₹2254.40, representing a solid 6% increase in the morning session. This follows a 9% gain in the company’s stock price the previous day, adding to the company's growing stock market momentum.
In the last five trading sessions, the company's shares have risen over 18%, edging closer to their 52-week high. This consistent upward trend highlights the market’s positive response to the recent developments, reinforcing its appeal to investors.
Settlement of dues with Edelweiss
The primary driver of this stock rally has been Reliance Infrastructure’s announcement that it had fully settled its obligations with Edelweiss. The company issued a statement confirming the payment of ₹235 crore towards the NCDs, effectively clearing its debt with the asset reconstruction company. This marks a significant step in improving the company’s financial position and reducing liabilities.
Reliance Infrastructure further clarified that Edelweiss does not hold any equity in the company and is neither a related party nor a member of the promoter group. This transparency is expected to bolster investor confidence as the company moves towards financial stability.
Other settlements and agreements
In addition to the settlement with Edelweiss, Reliance Infrastructure has made progress on other financial fronts. The company recently entered into an agreement with Adani Electricity Mumbai Limited (AEML) and Adani Energy Solutions Limited (AESL), formerly known as Adani Transmission Limited. This agreement aims to resolve ongoing disputes and involves the withdrawal of arbitration claims between the two parties. The terms of the settlement were mutually agreed upon on 17th September 2024.
Furthermore, Reliance Infrastructure has also received communication from Invent Assets Securitisation and Reconstruction Private Limited (Invent ARC), another lender of the company, confirming that the company's fund-based outstanding is now zero. This follows a novation of charged security to settle its dues, further improving the company’s debt position.
Impact on investors
The recent series of settlements and debt clearances reflect a positive turn for Reliance Infrastructure’s financial health. These developments, coupled with the stock's significant upward movement, make it an attractive prospect for those looking to invest in stocks. Investors are likely to take note of the company’s improving debt profile and its efforts to resolve disputes and obligations with key stakeholders.
In conclusion, Reliance Infrastructure’s 6% rise in share price following the settlement of ₹235 crore dues to Edelweiss signals a strengthened financial position, which is expected to contribute positively to the company’s future performance. The company’s proactive approach to resolving disputes and settling liabilities could further drive market optimism in the coming months.
For android only