Good opportunity to earn money in Reliance Power shares, Stock to be bullish till Rs 67.17
Reliance Power shares experienced a significant boost, rising by 5% to reach Rs 40.06 per share on the Bombay Stock Exchange (BSE). This increase comes after the company’s board approved a preferential issue to raise Rs 1,524.60 crore through the issuance of up to 46.20 crore equity shares at Rs 33 each. The stock has reached a new 52-week high, reflecting strong investor confidence and market interest.
Main Points
The surge in Reliance Power’s share price can be attributed to several important developments:
- Board Approval for Fundraise: The board’s decision to raise funds through a preferential issue has been a pivotal factor. This capital will primarily be used for business expansion, investments in subsidiaries and joint ventures, and debt reduction.
- Investor Participation: Major investors, including Reliance Infrastructure Limited (the promoter), Authum Investment and Infrastructure Limited, and Sanatan Financial Advisory Services Private Limited, are participating in this fundraising initiative, which is expected to enhance the company’s financial stability.
- Market Sentiment: The overall market sentiment has been positive, buoyed by the company’s recent announcements regarding settling obligations worth Rs 3,872.04 crore related to Vidarbha Industries Power Ltd. (VIPL). This settlement has alleviated previous financial burdens and improved investor outlook.
- Performance Metrics: For the quarter ending June 30, 2024 (Q1 FY25), Reliance Power reported a narrowed consolidated net loss of Rs 97.85 crore compared to a loss of Rs 296.3 crore in the same quarter last year. Revenue increased by 6% to Rs 2,069.1 crore, further boosting investor confidence.
The trading volume for Reliance Power shares has seen a remarkable increase following these announcements. On September 25 alone, around 22 crore shares changed hands, significantly higher than the average daily trading volume of five crore shares over the past month. This spike indicates heightened interest from both retail and institutional investors.
Looking ahead to September 26, analysts predict that Reliance Power shares may continue their upward trajectory. Current forecasts suggest potential price targets ranging from Rs 35.25 to Rs 37.18 for tomorrow based on technical analysis and market trends. The stock is currently trading above critical support levels, which suggests that as long as it remains above these levels, the bullish trend is likely to persist.
From a technical standpoint, Reliance Power is trading below its 50-day moving average but remains above its 200-day moving average. Analysts recommend monitoring these averages closely; if the stock can break above the 50-day moving average, it may trigger further buying interest.
As of now, Reliance Power’s market capitalization stands at approximately Rs 16,091.99 crore with a price-to-earnings ratio of around 224.89 times and earnings per share at Rs 0.17. The company’s financial metrics indicate that while it has faced challenges in recent years—such as negative returns on equity—it remains a significant player in the energy sector.
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.
