Reliance Infrastructure's (R-Infra) share price witnessed a remarkable 12% rally to Rs 320 on the BSE, marking its highest level since January 2019. This surge was a direct result of the company's board approving a preferential issue to raise a substantial amount of Rs 3,014 crore through the issuance of up to 125.6 million equity shares at a per-share price of Rs 240.
The preferential issue, aimed at raising capital, is expected to boost R-Infra's net worth from Rs 9,041 crore to over Rs 12,000 crore. The company highlighted that this move will effectively eliminate their debt burden, positioning them strongly in the market. Additionally, the stock price of the Anil Ambani-promoted integrated power utilities company has seen a notable 41% surge in the past four trading sessions, following the announcement of debt reduction strategies. Trading volumes for R-Infra witnessed a significant uptick, with nearly 23 million equity shares changing hands in the initial 30 minutes of trading across the BSE and NSE.
Furthermore, R-Infra's board also greenlighted seeking shareholder authorization to raise up to Rs 3,000 crore through a Qualified Institutional Placement (QIP). The proceeds from the preferential issue are planned to be utilized for various business expansion activities, including investments in subsidiaries and joint ventures, catering to long-term working capital needs, and general corporate purposes. The company is deeply involved in providing engineering, procurement, and construction (EPC) services, power distribution in Delhi, and operating several projects in defense and infrastructure sectors such as Metro, Toll Roads, and Airports through dedicated special purpose vehicles. With these strategic financial moves, R-Infra aims to fortify its financial position and drive growth in its diverse business portfolio.