Shares of Reliance Infrastructure rose over 4% today in a sluggish market, offering a potential opportunity for those looking to invest in stocks. This surge followed the announcement that the board had approved a proposal to raise ₹2,930 crore through the issuance of unsecured foreign currency convertible bonds (FCCBs) to VFSI Holdings.
Market performance
Reliance Infrastructure's shares increased by 4.10%, reaching ₹345.80 compared to the previous close of ₹332.15 on the Bombay Stock Exchange (BSE). The company's market capitalisation now stands at ₹13,436.77 crore.
The shares have shown significant volatility over the past year, with a beta of 1.4. The stock's relative strength index (RSI) is presently at 75.7, suggesting it is trading in overbought territory.
The stock of Reliance Infrastructure is performing strongly, staying above the 5-day, 10-day, and other significant moving averages up to the 200-day.
Details of the FCCB issuance
In a regulatory filing, the company disclosed that the FCCBs will be unsecured and carry an ultra-low interest rate of 5% per annum, with a long maturity of 10 years. This funding strategy aligns with the company's growth objectives.
"The Board of Directors of Reliance Infrastructure Limited has approved raising funds to $350 million (₹2,930 crore) for VFSI Holdings Pte Limited, an affiliate of Varde Investment Partners, LP, a leading global alternative investment firm," the filing stated.
Employee stock option scheme
Additionally, the board has also approved an employee stock Option Scheme (ESOS) for all employees. This initiative allows for a grant of up to 2.60 crore equity shares valued at over ₹850 crore, representing 5% of the fully diluted capital. The ESOS aims to enhance employee earnings potential, aligning it with the company's overall performance and growth.
Key takeaways
This development provides an opportunity for investors looking to invest in stocks with significant growth potential.
For android only