Reliance Power Plunges 10% in A Firm Market: Here’s Why

By Malvika Gurung — Shares of the power generation company Reliance Power (NS:), a part of the Anil Ambani-owned Reliance (NS:) Group plunged 9.86% to Rs 19.2 apiece on Friday in an otherwise firm domestic market. 

The stock fell after the debt-laden company informed the exchanges on Thursday of raising Rs 933 crore (almost $117 million) to VFSI Holdings through a private placement of equity shares.

The company said in an exchange filing that it would issue up to 60 crore equity shares and/or warrants convertible into equity shares through preferential allotment on a private placement basis to VFSI Holdings, a foreign investor, and enter into an investment agreement with it.

Consequently, VFSI will pick up a 15% stake in Reliance Power at Rs 15.55 apiece. 

Few days back, the two companies entered into an agreement, where Reliance Power would avail a debt of up to Rs 1,200 crore or $150 million from the equity investor for settlement and discharge and/or acquisition and restructuring.

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