Shares of Reliance Power Ltd were locked at 5% upper circuit on 24 September after the company’s board of directors approved raising funds to the tune of Rs  1,524.60 crore through a preferential issue of up to 46.20 crore equity shares. The equity shares will be priced at Rs 33 per share. 

Moreover, the promoter of the company, Reliance Infrastructure Ltd is also looking to increase its equity stake by over Rs 600 crore. Other investors in this preferential issue include Sanatan Financial Advisory Services Private Limited and Authum Investment and Infrastructure Limited. 

The funds raised through this will be used for business expansion, debt reduction, investments in subsidiaries and joint ventures, and general corporate purposes. 

The preferential issue is expected to increase the company’s net worth to more than Rs 12,680 crore from Rs 11,155 crore while maintaining zero bank debt. The increased capital will support the company’s participation in the renewable energy sector. 

In its quarterly earnings for April-June, the company’s consolidated net profit narrowed to Rs 97.85 crore for the quarter from Rs 296.3 crore net loss reported in the same quarter of the previous fiscal year. 

The company, which was formerly known as Reliance Energy Generation Ltd, is a part of the Reliance Anil Dhirubhai Ambani Group.

At 3:30 pm, the shares of Reliance Power were locked 5% higher at Rs 40.05 on NSE.

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