Mumbai: Anil Ambani-controlled Reliance Power Ltd and Reliance Naval and Engineering Ltd on Monday surged over 26% and 39%, respectively, after last week’s RCom and Reliance Infra’s asset sale announcements eased concerns among investors over debt repayment.
Intraday, Reliance Power surged as much as 26.6%, its most since 2008, to hit a high of Rs63.60. It closed at Rs60.65 on BSE, up 20.7% from its previous close.
Reliance Naval and Engineering gained 39%, its biggest jump since listing in 2009, to hit a high of Rs68.55 a share intraday. The stock closed at Rs65.15 on BSE, up 32.3% from its previous close.
“Markets are anticipating that the debt reduction exercise in RCom and RInfra may now spill over to other group companies and the rally in these two stocks may get replicated in the other stocks as well. This has led to a rally in the other ADAG stocks though there has been limited fundamental change and more of speculation," said an analyst on condition of anonymity.
Last week, Reliance Jio Infocomm Ltd said it will buy a majority of the wireless assets of Reliance Communications Ltd. According to newspaper reports, the deal value is estimated to be Rs24,000 crore. Mintcould not ascertain the value of the transaction.
Earlier, RCom announced a debt resolution plant in which the company aimed to reduce Rs39,000 crore debt out of a total of Rs45,000 crore.
On 22 December, Reliance Infrastructure Ltd (RInfra) said it has signed a definitive binding agreement to sell its Mumbai power business to Adani Transmission Ltd for Rs18,800 crore. RInfra has said that it will use the proceeds to pay debt. The total debt as of September was at Rs19,074.95 crore. Reliance Naval has a debt of Rs8,418.67 crore while Reliance Power has a debt of Rs7,282.88 crore.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.