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Business News/ Markets / Stock Markets1.20 to 28.25: Reliance ADAG penny stock gives 2250% return in four years. More steam left?
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₹1.20 to ₹28.25: Reliance ADAG penny stock gives 2250% return in four years. More steam left?

Multibagger penny stock: Anil Ambani-backed company is in the news these days for raising ₹425 crore fund through borrowing

Multibagger penny stock has risen 185% in the last one year. (Photo: Bloomberg)Premium
Multibagger penny stock has risen 185% in the last one year. (Photo: Bloomberg)

Reliance Power shares are in the news these days for sharp upside movement in the last fortnight of FY24. After remaining in the base building mode from January 10, 2024, to March 13, 2024, this Reliance ADAG (Anil Dhirubhai Ambani Group) company is in the news these days for debt reduction and capital infusion by Reliance Commercial Finance. This led to strong buying in Reliance Power shares. After ending at 20.40 per share level on 13th March 2024, this Anil Ambani-backed company's stock price has scaled up to 28.25 apiece level on NSE, logging nearly 40 percent appreciation in a fortnight. However, Reliance ADAG company's stock has shown a strong upside in the post-COVID rebound. In the last four years, Reliance Power share price has surged from 1.20 per share to 28.25 per share level on NSE, recording around 2,250 percent rise in this time.

Also Read: Stocks to buy in FY25: Top 5 mid-cap, small-cap shares to buy in new fiscal

So, in the post-COVID time, the penny stock has turned into a money-making stock for its shareholders by delivering to the tune of 2,250 percent returns. However, Reliance Power shares need to travel a long way to return the lost money of its investors, invested in the scrip at the time of share listing. Reliance Power IPO was launched in January 2008 at a price band of 405 to 450 per equity share and it listed at 547.80 on BSE and at 530 on the NSE. After the share listing, Reliance Power was given 3:5 bonus shares as well.

Reliance Power news

The Reliance ADAG company recently informed Indian stock market exchanges about the fundraising to the tune of 425 crore. The Anil Ambani-backed company went on to add that the fundraising would be done via borrowing.

Reliance Power informed about the fundraising saying, "We wish to inform you Rosa Power Supply Company Limited and Tato Hydro Power Private Limited (Lending Companies), wholly owned subsidiaries of the Company have entered into the respective Agreements on March 28, 2024 with Reliance Velocity Limited (Borrowing Company), a wholly-owned subsidiary of Reliance Infrastructure Limited, the Promoter Company, for lending secured borrowings in tranches in the form of inter-corporate deposits aggregating to 425 crore."

"The aforesaid lending transactions are related party transactions and have been done on an arm’s length basis. The Promoter Company holds 23.15% equity shares in the Company," Reliance Power added.

Reliance Power share price target

Speaking on the outlook of Reliance Power shares, Sumeet Bagadia, Executive Director at Choice Broking said, "Reliance Power shares are in continuous uptrend for the last two weeks. However, the stock is facing a hurdle at 30 per share level. Reliance Power shares have strong support at 22 apiece level. So, those who have Reliance Power shares in their portfolio should maintain strict stop loss at 22 apiece level. On breaching this immediate hurdle, the stock may touch the 34 per share mark in the short term."

On the suggestion to the fresh investors, Sumeet Bagadia said that fresh buying is not advised at the current market price. One can initiate fresh buying once the stock gives a breakout above 30 apiece on a closing basis. He said that once the stock gives a breakout above 30, current shareholders can upgrade their trailing stop loss to 28. He said that fresh buyers may also buy the stock above 30 apiece level maintaining a stop loss at 28 for a short-term target of 34.

Disclaimer: The views and recommendations above are those of individual analysts, experts, and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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ABOUT THE AUTHOR
Asit Manohar
Chief Content Producer at Live Mint Digital Team
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
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Published: 30 Mar 2024, 03:21 PM IST
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