Anil Ambani's Reliance Power Aims To Be Debt-Free By FY24-End; Stock Jumps 5%

Shares of Reliance Power, led by Anil Ambani, soared by 5% on Wednesday, reaching a high of Rs 23.83 on the BSE. This spike follows reports that the company successfully settled its debts with three banks-ICICI Bank, Axis Bank, and DBS Bank-last week. The move is part of Reliance Power's efforts to become a debt-free entity by the end of the current fiscal year.

According to The Economic Times, a senior executive from a commercial bank revealed, "Reliance Power aims to be a debt-free company by the end of this fiscal year. The only debt on its books will be the working capital loan from IDBI Bank." The report also mentioned that the three lenders collectively had about Rs 400 crore exposure to Reliance Power and have recovered close to 30-35% of their principal loans.

In a notice issued to the exchanges on January 7, Reliance Infrastructure and JC Flowers ARC entered into a standstill agreement until March 20, 2024, which was later extended to March 31, 2024. Under this agreement, JC Flowers ARC agreed not to take legal action against Reliance Infrastructure until March 31.

Reliance Power had previously disclosed that its total financial indebtedness as of December 31, 2023, stood at Rs 765 crore, while Reliance Infrastructure reported a total financial indebtedness of Rs 4,233 crore for the same period. Earlier disclosures also revealed that Reliance Power had settled loans with two lenders-JC Flowers ARC and Canara Bank-in April 2023.

The market's positive response to Reliance Power's debt settlement indicates growing confidence in the company's financial stability and its efforts to streamline its operations. With a clear roadmap to become debt-free, Reliance Power aims to strengthen its position in the market and enhance shareholder value.