Reliance Power to Reliance Infrastructure: Why Anil Ambani-owned Reliance ADAG stocks are skyrocketing? EXPLAINED

Stock Market Today: Anil Dhirubhai Ambani group (ADAG) stocks — Reliance Power and Reliance Infrastructure — are skyrocketing lately. Reliance Power share price gained more than 5% in morning trade on Wednesday and is up more than 70% in a month. Meanwhile, Reliance Infrastructure share price, which rose 1% in early trade today, has surged almost 60% in a month.

Buy what's behind the gains in Anil Ambani-owned Reliance ADAG stocks? The rally in both Reliance Power and Reliance Infrastructure share prices has been led by positive developments.

Reliance Power recent developments

Reliance Power Q4 results have been a major reason behind the shift in investor sentiment. Compared to a loss of ₹397.56 crore in the year-ago quarter (Q4 FY24), Reliance Power reported a consolidated profit of ₹125.57 crore during the January to March 2025 quarter or Q4FY25.

Positive order inflows also contributed to the rise in share prices. On May 28, SJVN Limited, a Navratna PSU, awarded the letter of award (LOA) to Reliance NU Energies Private Limited, a subsidiary of Reliance Power, for a 350 MW solar power project connected to the interstate transmission system (ISTS) and a 175 MW/700 MWh battery energy storage system (BESS).

Reliance Infrastructure strengthen its defence portfolio

On Tuesday, post-market hours, the company announced that Reliance Defence and German Diehl Defence are strengthening their strategic partnership.

As per the Reliance Infrastructure release, Helmut Rauch, the CEO of Diehl Defence, and Anil D. Ambani, the founder and chairman of Reliance Group, discussed further about the specifics of the strategic relationship on guided munitions and terminally guided munitions. The relationship is in place, based on a co-operation agreement, which was signed in 2019.

Reliance ADAG stocks: What's driving the rally?

Anil Ambani-owned Reliance ADAG group stocks have witnessed a sharp rally, driven by a combination of strategic developments, financial clean-ups, and renewed investor optimism, said experts. 

The defence joint venture between Reliance Infrastructure and Germany's Rheinmetall has marked a significant entry into India's growing defence sector, boosting confidence in the group's long-term growth prospects, said Seema Srivastava, Senior Research Analyst at SMC Global Securities.

“Reliance Power's transformation story has gained traction after securing a 25-year solar and battery storage PPA with Bhutan's Druk Green Power, Asia's largest such project, and reporting turnaround in Q4 FY25; the company achieved a pre-tax profit of ₹67.15 crore in Q4 FY25, a stark contrast to the pre-tax loss of ₹461.35 crore in Q4 FY24. EBITDA stood at ₹590 crore for the quarter. Its debt-to-equity ratio improved significantly to 0.88:1 in FY25, down from 1.61:1 in FY24, one of the lowest in the industry,” highlighted Srivastava.

Debt reduction efforts have also played a key role, with Reliance Infrastructure bringing down its standalone net debt to nearly zero and Reliance Power raising capital through preferential allotments. 

The recent NCLAT stay on insolvency proceedings against Reliance Power and the resolution of Reliance Capital's insolvency through a ₹9,650 crore acquisition by IndusInd International Holdings Ltd have lifted major legal overhangs, adding to bullish sentiment, said Srivastava

These factors, as per her, have created a perfect storm for a re-rating of ADAG group stocks, which are being re-evaluated by the market as turnaround opportunities with strong potential, rather than distressed assets. 

The market's renewed optimism is driven by improved earnings, debt cleanup, legal relief, and fresh funding, positioning the ADAG group for potential long-term growth and revival. Overall, the group's strategic business wins and financial restructuring have sparked a significant rally, presenting a compelling opportunity for investors.

"The company’s improved balance sheet and profitability signal stronger cash flows and reduced financial risk, key ingredients for stock price appreciation," as per Rajesh Sinha, Senior Research Analyst at Bonanza.

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