Reliance Power Stock Hits 5% Lower Circuit After Gaining 80% in a Month to Reach 1-Year High

Reliance Power’s share price, which recently surged by more than 80% in a month to hit a 1-year high of ₹54.25, encountered a 5% drop and was locked in the lower circuit on Friday.

The stock opened at ₹54.25 on the BSE, more than 1% higher than the previous close of ₹53.65. It hit its 52-week high of ₹54.25 before slipping by 5%, reaching the lower circuit at ₹50.97 on the BSE. The same happened on the NSE, where the stock hit its lower circuit at ₹50.95, down by 5%. On Thursday, Reliance Power shares had also touched a 1-year high of ₹53.60 on the NSE.

Despite today’s correction, Reliance Power shares have gained more than 170% over the past year, providing investors with multibagger returns. In the month before today’s correction, the stock had already risen by over 80%.

Reliance Power remains in focus as it has significantly reduced its debt and is now in the process of raising additional funds.

Reliance Power’s Focus on Debt Settlement and Fundraising

The Board of Directors of Reliance Power, during a meeting held on Thursday, October 3, 2024, approved the issuance of up to $500 million (₹4,200 crore) in ultra-low-cost Foreign Currency Convertible Bonds (FCCBs) at an interest rate of 5% per annum. These unsecured bonds will have a 10-year tenure and will be issued on a private placement basis to affiliates of Värde Investment Partners, LP.

On September 17, Reliance Power announced that it had settled debt obligations worth ₹3,872.04 crore related to the corporate guarantee provided to the lenders of its former subsidiary, Vidarbha Industries Power Limited (VIPL). This information was confirmed in an exchange filing.

According to Reliance Power’s recent exchange filings, the company now has zero debt from banks and financial institutions. Its net worth on a consolidated basis stands at ₹11,155 crore as of June 30, 2024.

Reliance Power’s recent achievements in debt reduction and its plans for raising funds through FCCBs are key factors keeping the stock in the spotlight, even as it faces some market corrections today.