Reliance Infrastructure to Raise ₹6,000 Crore: All You Need to Know About the Preferential Allotment and QIP
Reliance Infrastructure, led by Anil Ambani, announced significant financial maneuvers aimed at strengthening its market position. The company is set to receive a substantial equity infusion of ₹1,100 crore from its promoters. This move comes as part of a broader strategy to enhance the company’s financial stability and operational capabilities.
Main Points
Reliance Infrastructure’s Financial Infusion Details
In a recent filing, Reliance Infrastructure revealed that it would raise a total of ₹6,000 crore through various means. This includes ₹3,014 crore through a preferential allotment of shares and another ₹3,000 crore via a Qualified Institutional Placement (QIP). The preferential issue will involve the issuance of approximately 12.56 crore equity shares at an issue price of ₹240 each.
The promoters will invest ₹1,104 crore through Risee Infinity Private Limited, which will subscribe to 4.60 crore shares. Other notable investors include Mumbai-based Fortune Financial & Equities Services and Florintree Innovations LLP, which are set to contribute ₹1,058 crore and ₹852 crore respectively. This infusion is expected to bolster Reliance Infrastructure’s net worth from ₹9,000 crore to around ₹12,000 crore while maintaining a nearly zero debt status.
Stock Performance and Market Response
Following the announcement of these financial strategies, Reliance Infrastructure’s stock price surged by 12% on the Bombay Stock Exchange (BSE), reaching a new 52-week high of ₹320. Over the past week, the stock has experienced a remarkable increase of 50%, indicating strong investor confidence. Analysts are optimistic about the stock’s future performance, with some suggesting it could trade within a range of ₹255 to ₹320 in the short term.
Technical indicators also reflect a bullish sentiment. The stock has been trading above all major moving averages and has a one-year beta of 1.3, signaling high volatility. However, some analysts caution that the stock may be overbought and recommend that investors consider booking profits if it closes below certain support levels.
Debt Reduction Initiatives
In addition to raising capital, Reliance Infrastructure has made significant strides in reducing its debt burden. The company announced that it has successfully lowered its standalone external debt from ₹3,831 crore to just ₹475 crore. This reduction is part of a strategic effort to improve its financial health and operational flexibility.
Furthermore, Reliance Infrastructure has cleared outstanding dues with several lenders, including Life Insurance Corporation of India and ICICI Bank. This proactive approach not only enhances the company’s creditworthiness but also positions it favorably for future investments and expansions.
Future Plans and Strategic Directions
The proceeds from the preferential issue will be utilized for various purposes. These include expanding business operations directly or through investments in subsidiaries and joint ventures. Additionally, funds will be allocated for long-term working capital needs and general corporate purposes.
Anil Ambani’s firm is also exploring new avenues for growth. Reports indicate plans to manufacture Phantom II drones in India as part of an initiative to counter foreign drone threats. This venture could further diversify Reliance Infrastructure’s portfolio and open new markets for the company
Disclaimer: The information given in this article is from investment experts and brokerage companies, they do not represent Local Haryana. Before taking any investment related decision, you must consult a certified expert.
