In September, Anil Ambani Group stocks saw a significant resurgence, with Reliance Infrastructure and Reliance Power rallying 60% each. This rally followed positive developments that restored investor confidence, reversing previous underperformance. Key factors behind the turnaround included the companies’ focus on debt restructuring and improved operational efficiency.

Reliance Infrastructure hits highest level since December 2018

Reliance Infrastructure shares surged 60% in September to close at ₹336.20 apiece, their highest level since December 2018. 

Last week, the company announced a ₹780 crore victory in an arbitration dispute against Damodar Valley Corporation.

The company is actively expanding into high-growth sectors while significantly reducing its debt, which has decreased from ₹3,831 crore to ₹475 crore. Recently, it settled all obligations with Edelweiss Asset Reconstruction Company regarding non-convertible debentures for ₹235 crore.

It has also cleared outstanding dues to major lenders, including Life Insurance Corporation of India (LIC) and ICICI Bank. Additionally, a mutual settlement was reached with Adani Electricity Mumbai Limited and Adani Energy Solutions Limited, leading to the resolution of disputes and withdrawal of arbitration claims as of September 17, 2024, according to the company’s exchange filing.

Reliance Infrastructure is primarily engaged in the business of power distribution in Delhi and providing EPC services. It also operates certain projects in the defence sector and maintains the infrastructural aspects of certain Metro services, toll roads and airports through its special-purpose vehicles.

The company is looking to raise up to ₹6,014 crore through the sale of shares and convertible warrants.

Reliance Power: Debt-free status boosts investor confidence

Shares of Reliance Power, a subsidiary of Reliance Infrastructure, have also witnessed a strong rally, surging 60% in September to ₹48.6 apiece, their highest level since January 2018. The rally gained momentum in mid-September after the company announced it had become debt-free from banks and financial institutions.

This milestone was achieved following the company’s settlement of all obligations as a guarantor for Vidarbha Industries Power Limited (VIPL). As a result, Reliance Power was released from its corporate guarantee and all related undertakings and claims on VIPL’s outstanding debt, which totalled ₹3,872.04 crore.

The company’s board is scheduled to meet on October 3, 2024, to consider raising long-term funds from both domestic and global markets. The coal power-generating company has previously stated that it needs capital to expand into the renewable energy sector.

Meanwhile, in August, SEBI banned Reliance Group chairman Anil Ambani from the securities market for five years and imposed a fine of approximately $3 million due to allegations of fund diversion

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