Shares of Reliance Power surged by 5% for the eighth consecutive session on September 27th, outperforming the benchmark indices, which remained largely flat. This remarkable rally began on September 9th, driven by multiple key developments that have fuelled investor confidence.
Major battery storage contract boosts stock
On September 16th, Reliance Power shares hit the upper circuit after the company secured a significant 500 MW/1000 MWh Battery Storage Contract from the Solar Energy Corporation of India (SECI). This project positions the company as a key player in one of the world's largest standalone battery energy storage initiatives. Investors looking to invest in stocks saw this as a significant growth opportunity, further boosting market sentiment.
Debt resolution and corporate guarantee discharge
The stock witnessed another positive trigger on September 18th after Reliance Power announced its release from corporate guarantees and obligations related to its subsidiary Vidarbha Industries Power Limited (VIPL). The company had settled disputes with CFM Asset Reconstruction Private Limited (CFM), leading to the discharge of ₹3,872.04 crore of outstanding debt. This marked another significant win for the Anil Ambani-led firm, leading to further stock gains as investors continued to invest in stocks in the power sector.
Plans for long-term resource mobilisation
On September 19th, the company's stock surged again as it revealed plans to raise long-term funds from both domestic and global markets. The announcement of a board meeting scheduled for September 23rd to approve these plans added to the bullish sentiment surrounding the stock. This move to strengthen its financial position further increased interest from investors aiming to invest in stocks with promising growth potential.
Preferential issues add to the rally
On September 23rd, Reliance Power announced a preferential issue of 46.2 crore equity shares valued at ₹1,524.60 crore. This was offered at ₹33 per share, representing a 14% discount to the previous closing price. The issue was primarily made to promoter Reliance Infrastructure Ltd and non-promoter entities. These strategic moves are expected to fuel further growth, attracting more investors eager to invest in stocks of companies with solid financial strategies.
Key takeaways
With a year-to-date gain of 93% and a one-year surge of 140%, Reliance Power continues to offer promising returns for investors.
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