Reliance Infra shares: Anil Ambani-owned stock jumps 6% on fund raising talks

Stock market today: Share price of Anil Ambani-owned Reliance Infrastructure rose 6 per cent during the early trading session on September 17 following speculations about upcoming fundraising activities.

According to exchange filings, this surge comes following the official announcement regarding the board meeting scheduled to discuss potential capital raising options.

Reliance Infrastructure shares were trading in the green, up 5.45 per cent. It touched 227.50 on the BSE at 12:11 pm on September 17. It hit a 52-week high on April 4, 2024. 308.00, which is 25 percent higher than the current last traded price (LTP).

Recently, the Securities and Exchange Board of India (SEBI) has taken strict action against leading industrialist Anil Ambani. The market regulator has imposed a financial penalty and a five-year ban on Ambani's participation in capital market activities. These steps are related to the investigation of alleged improper fund transfer.

Reliance Infrastructure on September 16 announced that its board would meet on September 19, 2024, to consider various modes of raising funds.

Anil Ambani's stake in Reliance Infrastructure

Anil Ambani holds 1,39,437 shares of Reliance Infrastructure, which is about 0.04 per cent of the total paid-up capital of the company.

As part of the promoter group, Anil Ambani's mother Kokila D. Ambani holds the largest stake among individual family members with 2,74,937 shares, which is 0.07 percent of the company's total shares. Anil Ambani's wife Tina Ambani holds 1,23,812 shares (0.03 percent). Anil Ambani's eldest son Jai Anmol Ambani holds 1,25,231 shares (0.03 percent). Interestingly, the youngest son Jai Anshul Ambani owns only 7 shares, which is 0.00% of the total.

Reliance Infrastructure's fundraising plan

The company is considering various ways to raise funds, including:

– Issuing securities that can be converted into shares

– Offering warrants that can be converted into shares

– Preferential issue (offering of shares to specific investors)

– Qualified Institutional Placement (selling shares to qualified institutional buyers)

– Rights issue (offering of new shares to existing shareholders)

– Other possible methods

The board meeting will also consider issuing equity shares, convertible warrants and other equity-linked securities. The methods under consideration range from a preferential issue to a qualified institutional placement and a rights issue.

The company announced in an exchange filing, “Pursuant to Regulation 29 and other applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ('Listing Regulations'), we wish to inform you that a meeting of the Board of Directors of the Company has been convened on Thursday, September 19, 2024, to inter alia consider and approve the raising of long-term resources from the domestic and/or global markets, inter alia, by issue of equity shares/equity-linked securities/warrants convertible into equity shares, preferential issue and/or qualified institutional placement and/or rights issue or any other manner including determination of issue price, if any and obtaining of members and other approvals, as the Board may deem fit.”

This potential fundraising initiative comes at a time when many infrastructure companies are looking to strengthen their financial position amid challenging market conditions. Investors are reacting positively to the news, as evidenced by the sharp rise in the company's stock price.

Meanwhile, in the last three years (FY22-FY24), the Government of India has spent approx Rs 23 lakh crore will be spent on infrastructure, with capital expenditure as a percentage of GDP increasing from 1.6 per cent in 2018-19 to 3.2 per cent in 2023-24.

This may come as a relief, as Anil Ambani is facing regulatory scrutiny after Sebi fined him and barred him from the capital markets for five years in an alleged fund diversion case.

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