The recent rally followed the company’s board approving the issuance of up to 46.2 crore equity shares and/or warrants worth Rs 1,525 crore through a preferential allotment on Monday.
Reliance Infrastructure, the company’s promoter, will increase its equity stake by over Rs 600 crore. Other investors participating in this preferential issue include Authum Investment and Infrastructure Limited and Sanatan Financial Advisory Services Private Limited.
The company intends to utilise the funds raised from the preferential issue to be used to expand business operations, either directly or through investments in subsidiaries and joint ventures. A portion of the proceeds will also go toward reducing debt and other general corporate purposes.
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Reliance Power, a retail investor’s favourite, had also made headlines after announcing that it has resolved its obligations worth Rs 3,872.04 crore towards CFM Asset Reconstruction. In exchange for the release and discharge of Reliance Power’s guarantee, 100% of VIPL’s shares have been pledged to CFM.Earlier, the company saw a decline when the market regulator SEBI barred Anil Ambani from the securities market for five years due to fund siphoning from Reliance Home Finance.The shares of Reliance Power have been a multibagger, gaining 141.6% in the last one year while on a year-to-date basis, the stock has nearly doubled after increasing by 93.6%.
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