Sat Sep 21 01:52:39 UTC 2024: ## Reliance Infrastructure Stock Surges 50% in a Week After Fund Raising Announcement
**Mumbai, India** – Shares of Reliance Infrastructure surged 12% in early trading today after the company announced plans to raise Rs 3,014.4 crore through a preferential issue of equity shares. This follows a week of impressive gains, with the stock price increasing by a remarkable 50%.
The company’s board also approved seeking shareholder approval for a Qualified Institutional Placement (QIP) worth up to Rs 3,000 crore.
The preferential issue will be made to promoter group entity Risee Infinity Private Limited and other non-promoter entities, including Florintree Innovation LLP and Fortune Financial & Equities Services Private Limited. The company expects this to enhance the promoter’s equity stake.
The proceeds from the fund-raising initiatives will be utilized for expanding business operations, investing in subsidiaries and joint ventures, meeting long-term working capital requirements, and general corporate purposes.
Earlier this week, Reliance Infrastructure reported that it has significantly reduced its standalone external debt from Rs 3,831 crore to Rs 475 crore. This, along with the repayment of dues to various lenders, has resulted in a net worth of Rs 9,041 crore.
Despite the recent surge in share price, Reliance Infrastructure still holds a negative PE ratio of -7.11, indicating a lack of profitability. However, analysts believe that the company’s debt reduction strategy and expansion plans will contribute to future growth.
While some analysts suggest booking profits due to overbought conditions, others remain optimistic, with a target price of Rs 350. The stock is expected to trade between Rs 255 and Rs 320 in the short term.
First Piper 