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Home / Markets / Stock Markets /  Reliance Power, Rel Infra stocks surge. Why ADAG stocks are rallying

NEW DELHI : Anil Dhirubhai Ambani Group (ADAG) shares Reliance Power and Reliance Infrastructure or Reliance Infra share price shot up near 5 per cent in the opening bell today. According to stock market experts, this rise in the ADAG group shares is because of the preferential share transfer by Reliance Power to Reliance Infra. They said that the market is speculating debt reduction in Reliance Power after the move leading to rise in profit making probability.

Speaking on the immediate reason for rise in Reliance Infra and Reliance Power stocks' rally Ravi Singhal, Vice chairman at GCL Securities said, "This rally in Reliance Infra and Reliance Power is due to the positive sentiments getting triggered after the news break of Reliance power transferring preferential shares into Reliance Infrastructure. It has triggered positive sentiment about both the ADAG group stocks expecting debt reduction in Reliance Power with the help of Reliance Infra."

Highlighting upon the market expectation after this preferential share transfer news Avinash Gorakshkar, Head of Research at Profitmart securities said, "This rally in these two ADAG stocks indicates that the market has strong belief in the profit-making potential of the company but due to the high debt of these companies, they were not ready to put money in these penny stocks. however, after the preferential share transfer, institutional investor may look towards the stock and if that happens, we can witness sharp rise further in these stocks." However, he advised investors to remain away from these stocks as nothing concrete can be assumed till any big investment comes in the ADAG companies from outside, say from FIIs, DIIs, etc.

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