Reliance Infra jumps on debt reduction, fundraising plan; up 48% in 4 days

The company's Board has approved to raise Rs 3,014 crore through preferential issue. It will also consider a QIP worth Rs 3,000 crore

Reliance Infrastructure (R-Infra) share price rallied 12 per cent to Rs 320 on the BSE in Friday's intraday trade, hitting the highest level since January 2019. The spurt in R-Infra shares came after the company's board, on Thursday, approved a preferential issue to raise Rs 3,014 crore through the issuance of up to 125.6 million equity shares at a price of Rs 240 per share.

R-Infra said the preferential issue will enhance the company's net worth from Rs 9,041 crore to over Rs 12,000 crore. The company has near zero debt.

Meanwhile, in the last four trading sessions, the market price of Anil Ambani-promoted integrated power utilities company has zoomed 41 per cent after the announcement of debt reduction.

 

The stock is trading close to its 52-week high level of Rs 308, touched on April 4. At 09:26 AM, it was quoting 6 per cent higher at Rs 302.10 as compared to 0.28 per cent gain in the BSE Sensex. The counter saw huge trading volumes, with nearly 23 million equity shares changing hands, together, on the BSE and NSE in the first 30 minutes of trading.

R-Infra, in an exchange filing, said the preferential issue will be made to Risee Infinity Private Limited, a promoter group company, and to other investors, namely Florintree Innovation LLP and Fortune Financial & Equities Services Private Limited, resulting in an increase in the promoters' equity stake.

Reliance Infra QIP news

Further, R-Infra's board also approved seeking authorisation from the shareholders to raise up to Rs 3,000 crore through a Qualified Institutional Placement (QIP).

The company said the preferential issue proceeds would be utilised for the expansion of business operations directly and/or through investment in subsidiaries and joint ventures, including meeting long-term working capital requirements and for general corporate purposes.

R-Infra is engaged in the business of providing engineering, procurement, and construction (EPC) services, power distribution in Delhi and the company is also engaged in implementation, operation and maintenance of several projects in defence sector and infrastructural areas like Metro, Toll Roads and Airports through its special purpose vehicles. It has executed the Mumbai Metro line one project on build, own, operate and transfer basis.

On Wednesday, R-Infra said it has reduced its standalone external debt by almost 87.6 per cent to Rs 475 crore, down from Rs 3,831 crore as of June.

Invent Assets Securitisation and Reconstruction Private Limited, 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 zero, R-Infra said.

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.