Reliance Power shares surge 5%, up for 6th day; here's why

Shares of Reliance Power Ltd climbed 5 per cent in Thursday's trade, taking its wining run to the sixth trading session. The stock gained, as the board of directors of Reliance Power are scheduled to meet on September 23 to consider and approve raising of long term resources from domestic and/or global markets.

Reliance Power said the fundraising can be carried either by the issue of equity shares or equity-linked securities or warrants convertible into equity shares; or by the way of preferential issue and/or qualified institutional placement. The funds may also be raised via rights issue and/or foreign currency convertible bonds, the Anil Ambani-led company said in a BSE filing. 

Following the development, the stock hit its 5 per cent upper circuit limit at Rs 34.62. The scrip has climbed 17 per cent in six sessions. 

The stock was recently in news after the private sector power generation company said it has been released and discharged of its corporate guarantee, undertakings and all obligations and claims in relation to the outstanding debt of subsidiary Vidarbha Industries Power Limited (VIPL), amounting to Rs 3,872.04 crore. 

The company said it settled all disputes with CFM Asset Reconstruction Private Limited (CFM), as 100 per cent shares of VIPL have been pledged in favour of CFM against the release and discharge of corporate guarantee given by Reliance Power.

Reliance Infrastructure, which held 23.15 per cent stake in Reliance Power as on June 30,  also announced that a lender to the company, has novated certain charged securities to recover its dues. As a result, Invent ARC's entire fund based outstanding amount has been reduced to nil.

"Additionally, Reliance Infra has cleared its funded outstanding dues to Life Insurance Corporation of India, Edelweiss Asset Reconstruction Company Limited, ICICI Bank, Union Bank, and other lenders. The company’s external debt liability is down to Rs 475 crore. Consequently, the net worth of the Company will stand at Rs 9,041 crore," it said.

Shares of Reliance Infra were up 3.43 per cent at Rs 292.45.