Reliance Power Shares Soar 26% in Three Days After Company Turns Debt-Free

Synopsis : Reliance Power shares have surged by 26% in three days, driven by news of the company becoming debt-free. With significant trading volume and technical indicators suggesting continued momentum, analysts predict a trading range of Rs 25-32 in the short term.

Reliance Power shares have seen a remarkable surge, jumping 26.12% in just three trading days. The stock hit its upper circuit limit of Rs 31.53, continuing its strong upward trend. On a year-to-date (YTD) basis, the stock has risen by 31.65%.

Debt-Free Status Drives Share Price Up

The recent spike in Reliance Power's stock price follows a report from PTI, citing sources, that the company has become debt-free on a standalone basis. Previously, Reliance Power had around Rs 800 crore in debt, which has now been repaid to banks.

Trading Volume and Market Performance

The stock experienced heavy trading volume on the BSE, with around 1.5 crore shares changing hands, significantly higher than the two-week average of 67.42 lakh shares. The turnover reached Rs 46.41 crore, bringing the company's market capitalization to Rs 12,665.51 crore. There were nearly 43 lakh buy orders, with no sell orders reported.

Technical Indicators and Analyst Insights

Reliance Power's stock is performing well above its 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day simple moving averages (SMAs). The 14-day relative strength index (RSI) stands at 71.14, indicating an overbought condition.

The stock's price-to-equity (P/E) ratio is 235.23, with a price-to-book (P/B) value of 1.23. Earnings per share (EPS) is at 0.12, and the return on equity is 0.52.

Future Trading Range

According to Osho Krishan, Senior Research Analyst at Angel One, the stock faces an intermediate hurdle at Rs 32-34 in the short term, with support levels around Rs 24-26. Jigar S Patel, Senior Manager at Anand Rathi Shares and Stock Brokers, expects the trading range to be between Rs 25 and Rs 32 for the next month.

Company Background

Reliance Power, previously known as Reliance Energy Generation Ltd, is part of the Reliance Anil Dhirubhai Ambani Group. As of March 2024, the promoters hold a 23.24% stake in the company.

Disclaimer: The stock market news provided here is for informational purposes only and should not be interpreted as investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.