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Reliance Power's stock took a significant dip on Friday, plummeting by 5% and snapping a 15-day winning streak. This downturn was attributed to profit booking following the company's announcement of a substantial fundraising initiative. The news of the Rs 4,200 crore Foreign Currency Convertible Bonds (FCCBs) issuance to affiliates of Värde Investment Partners through private placement sent ripples through the market.
This move came shortly after Reliance Power allocated 46.20 crore equity shares worth Rs 1,524.60 crore to its promoter, Reliance Infrastructure Ltd, and two non-promoter entities. This was part of their strategy to bolster their renewable energy portfolio. Notably, the FCCBs carry an ultra-low interest rate of 5% per annum and will mature in 10 years. The conversion price for these bonds is set at Rs 51 per share, incorporating a premium of Rs 41. Upon conversion, the FCCBs will yield 82.30 crore equity shares.
Reliance Power's recent financial standing is marked by its zero debt position from banks and financial institutions. The company's consolidated networth reached Rs 11,155 crore as of June 30. These figures come after the resolution of disputes with CFM Asset Reconstruction Private Limited. This resolution involved pledging 100% of the shares of a subsidiary, VIPL, against the release and discharge of a corporate guarantee previously provided by Reliance Power.
Source: Why Reliance Power shares fell today? Stock snaps 15-day winning run