Reliance Infra, Reliance Power shares skyrocket as investors cheer debt settlement milestones

Reliance Infrastructure and Reliance Power shares hogged the limelight on Wednesday after the Reliance Group, led by top businessman Anil Ambani, announced significant milestones in terms of debt repayment. Reliance Power fully settled its entire financial obligation as a guarantor on behalf of Vidarbha Industries Power Ltd (VIPL) and Reliance Infrastructure brought its entire fund-based outstanding amount owed to Invent ARC to zero. 

Reliance Infrastructure (RELINFRA) shares zoomed by as much as Rs 18.8, or 8.0 per cent, to Rs 254.4 apiece while the Reliance Power stock gained by as much as Re 1.6, or 5.0 per cent, to Rs 33 on BSE during the session, as investors cheered the companies' moves.  

Reliance Power settled its obligation of Rs 3,872.04 crore towards its corporate guarantee to the lenders of VIPL, settling all disputes with CFM Asset Reconstruction Pvt Ltd.

"Reliance Power has settled all disputes with CFM Asset Reconstruction Private Limited (CFM). 100 per cent  shares of VIPL have been pledged in favour of CFM against the release and discharge of Corporate Guarantee given by Reliance Power," it said. 

The development led to the "release and discharge of Corporate Guarantee, Undertakings and all obligations and claims thereunder in relation to the outstanding debt of VIPL amounting to Rs 3872.04 crore", the company said. 

Reliance Power brought down its debt from banks and other financial institutions to zero whereas Reliance Infrastructure's external debt liability came down to Rs 475 crore from Rs 3,831 crore.

Reliance Infrastructure's net worth stood at Rs 9,041 crore and Reliance Power's at 11,155 crore, the companies said.

Reliance Infrastructure said Invent Assets Securitisation and Reconstruction Pvt Ltd had novated certain charged securities to recover its dues, bringing down its entire fund-based outstanding dues to Invent ARC to zero.

This development assumes significance as Reliance Infrastructure has already cleared its outstanding funded dues to several companies, including Life Insurance Corporation (LIC), Edelweiss Asset Reconstruction Company Ltd, ICICI Bank, and Union Bank. 

Reliance Infrastructure is engaged in the business of providing engineering, procurement, and construction (EPC) services. It also deals in businesses including power distribution in the national capital, and in the implementation, operation, and maintenance of several projects in the defence and infrastructure spaces.

Reliance Power is a leading private sector power generation and coal resources company. It has one of the largest portfolios of power projects in the country's private sector.

Both Reliance Group companies are headquartered in Mumbai.   

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