After Reliance Infra, Reliance Power set to raise long-term funds

Reliance Power's board is set to meet on Monday to consider raising long-term funds from domestic and/or global markets. The development comes after group company Reliance Infrastructure announced plans to raise funds to the tune of Rs 6,000 crore. 

The funds will be raised "either by way of preferential issue and/or QIP and/or rights issue and/or foreign currency convertible bonds", according to a regulatory filing dated September 18.

On September 18, Reliance Power announced that it had become a zero debt company on a standalone basis. On the same day, Reliance Infrastructure also announced that it had reduced its standalone external debt from Rs 3,831 crore to Rs 475 crore. The next day, on September 19, Reliance Infrastructure's board gave the nod to a plan to raise around Rs 6,000 crore.

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In the first phase, the company is launching a preferential placement of shares worth Rs 3,014 crore, wherein 12.56 crore equity shares or convertible warrants will be issued at an issue price of Rs 240 per share. Out of this, Rs 1104 crore is being invested by the promoters through promoter company Risee Infinity. 

Additionally, two Mumbai-based investment firms Fortune Financial and Florintree Innovation are going to invest Rs 1,910 crore in the company.

The preferential issue will enhance Reliance Infra's net worth from Rs 9,000 crore to Rs 12,000 crore with near zero debt. 

The proceeds of the preferential issue will be utilised for expansion of business operations.

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