Anil Ambani Super Stock: How Reliance Power Surpass Maharatna PSUs NTPC, Power Grid In Just 12-Sessions?

Anil Ambani-backed Reliance Power has emerged as a superstar in less than two weeks. Gaining by over 56% on NSE, Reliance Power becomes multi-bagger faster than Maharatna PSUs NTPC and Power Grid Corporation. The reason behind investors' newfound faith in Reliance Power is because of back-to-back fundraising proposals and reducing its debt drastically.

Reliance Power has touched back-to-back upper circuits. In total, the private stock touched 8 upper circuits from September 18 to September 27, which in total had 8 sessions. In these 8 trading days, Reliance Power stock skyrocketed by nearly 47% on the NSE.

But Reliance Power has been flying high on BSE and NSE since September 12. The last time Reliance Power was in red was on September 11, 2024, when the stock price was at Rs 29.56 apiece. Since then to date, Reliance Power stock surged by a whopping 56.8%.

Due to the strong buying from September 12 to September 28, Reliance Power emerges as a multi-bagger in its 1-year performance. In 2024 so far, the stock even outperformed power sector giants like NTPC and Power Grid.

YTD, Reliance Power surged by 93.53%, while in a year, the stock advanced by 142.04%.

Meanwhile, YTD and NTPC gained by 42% and Power Grid surged by 48.9%. In a year, NTPC gained by 85.74% and Power Grid by 76.66%.

From January 1 to September 11, 2024, NTPC and Power Grid gained higher than Reliance Power. NTPC was up by 62.82% and Power Grid had zoomed by 67.14%, while Reliance Power till that time had only advanced by 53.95%.

In a span of 12 trading sessions, from September 12 to September 28 of this year, Reliance Power outperformed with gains of 56.2%, against NTPC and Power Grid which only gained by 7.9% and 4.75% respectively.

By the end of the September 27, 2024 session, Reliance Power stock price was at Rs 46.35 apiece, which is its new 52-week high. On the other hand, NTPC and Power Grid stock prices stood at Rs 440.30 apiece and Rs 354.65 apiece respectively.

Why Reliance Power Stock Is On Winning Streak?

1. Settlement Of Obligations:

The Mumbai-headquartered Reliance Power earlier this month on September 17, announced that it has settled its obligation of Rs 3,872.04 crore towards corporate guarantee to the lenders of Vidarbha Industries Power Limited.

Accordingly, Reliance Power has settled all disputes with CFM Asset Reconstruction Private Limited (CFM). 100% shares of VIPL have been pledged in favour of CFM against the release and discharge of the Corporate Guarantee given by Reliance Power.

2. Preferential Issues:

Further, on September 23, Reliance Power also informed that the board of directors of the company approved the issuance of up to 46,20,00,000 equity shares and/or warrants convertible into equity shares of the Company at an Issue Price of Rs. 33/- per share aggregating Rs. 1,524.60 crore through preferential allotment.

As part of preferential issues, Reliance Infrastructure who is the promoter of the company will enhance its equity stake by over Rs 600 crore. The other investors in the Preferential Issue are Authum Investment and Infrastructure Limited and Sanatan Financial Advisory Services Private Limited.

Reliance Power plans to utilise the proceeds of preferential issues to enhance the company's net worth from over Rs 11,155 crore to more than Rs 12,680 crore. The listed entity has ZERO bank debt.

It also said, "The enhanced capital will support the company's participation in the renewable energy sector."

3. Fundraising Plan:

Going ahead, on October 3, the company's board of directors are scheduled to meet to consider and approve the raising of long-term resources from domestic and/or global markets, inter alia, by the issue of equity shares/equity-linked securities/ warrants convertible into equity shares, by way of a preferential issue and/or qualified institutional placement and/or rights issue and/or foreign currency convertible bonds or any other method including determination of issue price, if any and seeking members' and other approval(s), as the Board may deem appropriate.

Target Price For Reliance Power:

As per DailyBulls report, with favorable market conditions, the mid-year price target for Reliance Power Ltd could reach Rs 49.95. By the end of 2024, the price target for Reliance Power is expected to potentially reach Rs 56.93, considering bullish market trends.