Reliance Power to issue shares to VFSI Holdings at Rs 15.5; stock sinks 10%

Shares of Reliance Power tanked 9.8 per cent intra-day to Rs 19.2 apiece on the BSE in an otherwise firm market on Friday after the company said it would raise funds via private placement of shares. At 10:14 AM, the shares were down 9 per cent at Rs 19.3 as against a 0.5 per cent gain in the benchmark Sensex index.

The company, on Thursday, said that it would raise Rs 933 crore through a private placement of shares to VFSI Holdings, an affiliate of investment firm Varde Partners. This would result in VFSI picking up a 15 per cent stake in the company. READ HERE

Reliance Power said the private placement of shares will happen at Rs 15.55 apiece, which is 27 per cent lower than the company’s Thursday’s closing price of Rs 21.3 per share.

The announcement comes within days of Reliance Power stating that it would raise upto Rs 1,200 crore from Varde Partners, a global alternative investment firm specialising in credit and credit-related assets.

Reliance Power, is part of the Reliance Group owned by Anil Ambani, and has one of the largest portfolios of power projects in the private sector, based on coal, gas, hydro and renewable energy, with an operating portfolio of 5,945 megawatts.

However, the Reliance group has been struggling under a pile of debts leading to at least four of its companies being dragged to the bankruptcy process by its lenders.

Meanwhile, a report by Institutional Investor Advisory Services (IiAS) had said that the company has defaulted on loans to the tune of Rs 3,561 crore as on March 31, 2022. This was the principal amount, with the interest amount working out to Rs 1,783 crore. Lenders to Reliance Power include Axis Bank, Yes Bank and State Bank of India among others. READ MORE

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor