Reliance Power and Reliance Infra Surge to Nearly 5-Year Highs: As a result of reports that these companies are actively settling their debts, shares of Anil Ambani’s Reliance Group are trading near five-year highs.
Reliance Power and Reliance Infra Surge to Nearly 5-Year Highs: Reliance Power Debt Settlement
The Economic Times reported last week that Reliance Power had settled its debts with ICICI Bank, Axis Bank, and DBS Bank. The report, quoted one of the lenders, said that the three banks together had about ₹400 crore and they almost recovered 30-35% of their principal loans.
Reliance Power is planning to become a debt-free company by the end of the current financial year (FY24). According to the lender, “Reliance Power will only have a working capital loan from IDBI Bank on its books”.
Reliance Infra dues settlement
Reports suggest that Anil Ambani’s Reliance Infrastructure is also negotiating with JC Flowers Asset Reconstruction Company to settle its debt of ₹2,100 crore.
Yes Bank had originally lent in this case, but it had transferred its distressed loans to JC Flowers ARC. Reliance Infrastructure entered into a standstill agreement with the asset reconstruction company in January of this year, which means that the ARC will not launch any legal action against the company until March of 2024.
These developments have led to healthy gains for Reliance Power and Reliance Infrastructure during Wednesday’s trading session. During initial trading, Reliance Power gained more than 3%, while Reliance Infrastructure gained more than 2%.
Both the stocks are now near their five-year highs. For years, these stocks have traded at single-digit or low double-digit values.
Ambani’s comeback
The debt settlements and the rebound in share prices mark a comeback for Anil Ambani, the younger brother of Mukesh Ambani, one of India and Asia’s richest individuals. In 2008, Anil Ambani had not only become the world’s sixth wealthiest individual with a net worth of $42 billion, he was also richer than Mukesh Ambani. However, later, his business empire suffered several setbacks, and his wealth diminished.
