Reliance Power Ltd’s board of directors has approved a preferential share issue to raise ₹1,524.60 crore, as announced in a filing to the Bombay Stock Exchange (BSE) on September 23.
Following the announcement, Reliance Power shares rose by 4.98% to close at ₹38.16, up from ₹36.35 at Friday’s market close.
The board has authorized the issuance of up to 46.20 crore equity shares at an issue price of ₹33 per share, or convertible warrants. Reliance Infrastructure Ltd, the promoter of Reliance Power, plans to increase its equity stake with an investment exceeding ₹600 crore. Other participants in the preferential issue include Authum Investment and Infrastructure and Sanatan Financial Advisory Services.
Reliance Power intends to utilize the funds raised from this share issue to expand its business operations, either directly or through investments in subsidiaries and joint ventures. The company also aims to reduce its debt and allocate the funds for general business purposes. The increased capital will further support Reliance Power’s involvement in the renewable energy sector.
According to the company, the preferential issue will boost its net worth from over ₹11,155 crore to more than ₹12,680 crore. Notably, the company currently has zero bank debt. Additionally, a postal ballot will be conducted to seek shareholder approval for the preferential share issuance.
