Reliance Power To Raise Rs 4,200 Crore Via Bond Issue

Leading the way in India’s power industry and essential in supplying the nation’s expanding energy needs is Reliance Power Limited. Power projects using a variety of fuel sources, such as coal, gas, hydro, and renewable energy, have been developed and successfully put into service by the company. Reliance Power is dedicated to providing millions of people with dependable and reasonably priced electricity while simultaneously promoting the general economic expansion of the country, with a strong emphasis on sustainability and innovation. The company maintains its position as a major player in the global power industry by expanding its presence in both domestic and international markets through strategic partnerships and state-of-the-art technology.

Reliance Power To Raise Rs 4,200 Crore Via Bond Issue:

Reliance Power’s board of directors has approved plans to issue foreign currency convertible bonds (FCCBs) to affiliates of Värde Investment Partners, a global alternative investment firm with headquarters in Singapore, in order to raise Rs. 4200 crores. The bonds have a 10-year maturity period and an ultra-low interest rate of 5% annually. After that, they can be converted into equity at a rate of Rs 51 per share. The company anticipates using the proceeds to pay down debt and finance future expansion, especially in its renewable energy initiatives.

Reliance Power is getting ready to be debt-free:

The news comes after Reliance Power’s subsidiary Rosa Power paid Värde Partners Rs 850 crore in September, marking the company’s latest step towards debt elimination. The company is taking this action to fortify its financial position in the face of escalating demand and rivalry in the power sector. 

The board of the energy company authorized the bond issuance in addition to an Employee Stock Option Scheme (ESOS) that grants up to 22 crore equity shares to all employees of the company and its subsidiaries. As stated in the press release, the goal of the ESOS is to match employee compensation to business performance. The company hopes to move quickly in a competitive power generation market with the FCCBs and ESOS, subject to shareholder and regulatory approvals.

Today, the stock of Reliance Power Ltd. fell 5%:

Reliance Power Ltd.’s stock is currently trading at Rs. 50.95 per share, down 5% Intraday today, but given the company’s upcoming bond issue to raise Rs. 4200 crores, we can expect a good rise in the near future.

Conclusion: Reliance Power Ltd. wants to be debt-free, so issuing bonds to raise the necessary funds will be a game-changer for the company’s long-term growth.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.