Reliance Power Share Price may remain bullish till Rs 38, keep an eye on it at 9.45 am today

Shares of Reliance Power Ltd. are in the spotlight today after the company announced that it has settled all disputes with CFM Asset Reconstruction Private Limited (CFM) and its subsidiary Vidarbha Industries Power Limited (VIPL) has ceased to be a subsidiary. The company has also become debt-free from banks and financial institutions.

Reliance Power Settles Disputes with CFM

Reliance Power said in a BSE filing that it has settled all disputes with CFM Asset Reconstruction Private Limited (CFM). As part of the settlement, 100% of VIPL’s shares have been pledged in favor of CFM against the release and discharge of the corporate guarantee given by Reliance Power. Rosa Power Supply Company, a subsidiary of Reliance Power, has also withdrawn all proceedings initiated against CFM, while CFM has withdrawn all proceedings initiated against Reliance Power and Rosa.

VIPL Ceases to be a Subsidiary of Reliance Power

Reliance Power also announced that VIPL has ceased to be a subsidiary of the company. The pledge over 1,49,16,260 shares, representing 100% of VIPL’s equity share capital, created by Reliance Power and Rosa Power Supply Company, has been enforced by Axis Trustee Services as trustee for CFM Asset Reconstruction and Axis Bank Ltd, the lenders of VIPL. As a result, all voting rights in respect of VIPL’s shares will be exercised solely by the lenders, along with the takeover of VIPL’s management and control.

Reliance Power Becomes Debt-Free

As a result of the settlement, Reliance Power’s entire obligations as a guarantor on behalf of VIPL have been fully settled. This has led to the release and discharge of the company’s corporate guarantee, undertakings, and all obligations and claims related to VIPL’s outstanding debt of Rs 3,872.04 crore. Reliance Power said it has zero debt from banks and financial institutions and that its networth stood at Rs 11,155 crore on a consolidated basis as of June 30, 2024.

Reliance Power Participates in BESS Tender

In addition to the settlement, Reliance Power recently participated in a Request for Selection to establish a 500 MW/1000 MWh Battery Energy Storage System (BESS) invited by the Solar Energy Corporation of India (SECI) and is awaiting further communication.

Analysts’ Perspective

Analysts are positive about Reliance Power’s move to settle disputes and become debt-free. The settlement is expected to strengthen the company’s financial position and provide more flexibility in pursuing new opportunities in the power sector. The company’s participation in the BESS tender also indicates its focus on renewable energy and energy storage solutions.

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.