Reliance Infra share: Anil Ambani-owned stock jumps 6% on fundraise buzz

Stocks market today: Anil Ambani-owned Reliance Infrastructure share price jumped 6 per cent during the early trading session on September 17 following speculation about upcoming fundraising activities.

The surge follows an official announcement regarding a scheduled board meeting to discuss potential capital raising options, as per an exchange filing.

Reliance Infrastructure's share price was trading in the green, up 5.45 percent, at ₹227.50 on September 17, at 12:11 pm, on BSE. It hit a 52-week high on 4 April 2024, at ₹308.00, which is 25 percent over the current last traded price (LTP).

Recently, the Securities and Exchange Board of India (SEBI) has taken strict action against prominent businessman Anil Ambani. The market regulator has imposed financial penalties and enacted a five-year prohibition on Ambani's participation in capital market activities. These measures stem from an investigation into alleged improper fund transfers.

Reliance Infrastructure announced on September 16 that its board will meet on September 19, 2024, to explore various fundraising avenues.

Anil Ambani's shareholding in Reliance Infrastructure

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

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

Reliance Infrastructure fundraise plan

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

- Issuing new shares

- Issuing securities that can be converted into shares

- Offering warrants that can be converted into shares

- Preferential issue (offering shares to specific investors)

- Qualified institutional placement (selling shares to qualified institutional buyers)

- Rights issue (offering new shares to existing shareholders)

- Other potential methods

The board meeting will also include the issuance of equity shares, convertible warrants, and other equity-linked securities. The methods under consideration range from preferential issues to qualified institutional placements and rights issues.

"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, inter alia, to consider and approve raising of long term resources from domestic and/or global markets, inter alia, by issue of equity shares/equity-linked securities/ warrants convertible into equity shares, by way of preferential issue and/ or qualified institutional placement and/or rights issue or any other method including determination of issue price, if any and seeking members' and other approval(s), as the Board may deem appropriate," the company announced in an exchange filing.

This potential fundraising initiative comes at a time when many infrastructure companies are seeking to strengthen their financial positions amidst challenging market conditions. Investors appear to be responding positively to the news, as evidenced by the sharp rise in the company's stock price.

Meanwhile, the Indian Government over the past three years (FY22-FY24), the government has spent approximately ₹23 lakh crore on infrastructure, with capital spending as a percentage of GDP rising 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 faces regulatory scrutiny after Sebi imposed a fine and banned him from capital markets for five years due to an alleged fund diversion case.

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