Reliance Infrastructure Share Price may reverse to Rs 254, monthly resistance is Rs 308
Reliance Infrastructure’s share price captured significant attention in the stock market. The stock surged by over 12% during the trading session, reaching a new 52-week high of Rs 320 on the Bombay Stock Exchange (BSE). This remarkable increase comes after the company’s board approved a major fundraising initiative. The firm plans to raise Rs 3,014.4 crore through a preferential issue of up to 12.56 crore equity shares, priced at Rs 240 each. This fundraising effort is aimed at enhancing business operations and supporting long-term working capital needs.
Main Points
As of the close on September 19, 2024, Reliance Infrastructure shares ended at Rs 284.75, with a market capitalization of approximately Rs 11,279 crore. The stock’s recent performance has been impressive, having gained nearly 50% in just one week. Analysts have noted that the stock is currently trading above its moving averages across various time frames, indicating strong bullish momentum.
The one-year beta for Reliance Infrastructure stands at 1.3, suggesting high volatility in its share price. Technical indicators show a relative strength index (RSI) of 77.2, which indicates that the stock is neither overbought nor oversold at this time. This balanced position allows for potential further gains without immediate risk of a downturn.
The approved preferential issue will be directed towards promoter group entity Risee Infinity Private Limited and other non-promoter entities such as Florintree Innovation LLP and Fortune Financial & Equities Services Private Limited. This move is expected to increase the equity stake of promoters in Reliance Infrastructure.
In addition to the preferential issue, the company is seeking shareholder approval for a Qualified Institutional Placement (QIP) that could raise up to Rs 3,000 crore. The proceeds from these initiatives will be utilized for expanding business operations, investing in subsidiaries and joint ventures, and meeting general corporate requirements.
Debt Reduction and Financial Health
Earlier this week, Reliance Infrastructure reported a significant reduction in its standalone external debt from Rs 3,831 crore to just Rs 475 crore. This substantial decrease indicates a positive shift in the company’s financial health and enhances its net worth to approximately Rs 9,041 crore.
Moreover, Reliance Infrastructure has successfully cleared its outstanding dues with various lenders including Life Insurance Corporation of India and ICICI Bank. Such financial restructuring efforts are likely to bolster investor confidence and support the company’s growth trajectory.
Market analysts have provided mixed insights regarding the future performance of Reliance Infrastructure shares. Jigar S Patel from Anand Rathi has identified support levels at Rs 265 and resistance at Rs 308. He suggests that if the stock closes decisively above Rs 308, it could reach the Rs 320 mark.
Conversely, AR Ramachandran, an independent analyst registered with SEBI, cautions that while the stock appears bullish on daily charts, it is currently overbought. He advises investors to consider booking profits if the stock closes below the support level of Rs 279, as this could lead to a potential target of Rs 214 in the near term.
