Calcutta High Court upheld an arbitration award of Rs. 780 crore, Reliance Infra shares increased by 60% in a month.
The early session on September 30, ahead of the company’s board meeting to seek capital, saw Anil Ambani-led Reliance Infrastructure shares rise. The company also successfully won when the Calcutta High Court maintained an arbitration verdict of Rs 780 crore that favored Reliance Infrastructure.
Damodar Valley Corporation, located in West Bengal, and Reliance Infrastructure were at odds. More than ten years prior, Reliance Infrastructure secured a contract worth Rs 3,750 crore to establish a 1,200 MW thermal power plant in Purulia, West Bengal.
Due to disagreements and other factors, the project was delayed, and DVC is now suing Reliance Infrastructure for damages. The company contested this, nevertheless, and in 2019 an arbitration panel found in the company’s favor, ordering DVC to reimburse the company for Rs 896 crore.
In addition, tomorrow, October 1, the company’s board of directors will convene to discuss raising capital via a foreign currency convertible bond, qualified institutional placement, preferential issue, or rights issue.
Reliance Infrastructure’s shares were trading at Rs 329.84 at 9:18 a.m. on the NSE, 2.13 percent higher than the previous close.
This follows on September 19, when the board of Reliance Infrastructure approved raising Rs 3,014.4 crore through a preferential offer of up to 12.56 crore equity shares at an issue price of Rs 240 per share.
According to a regulatory filing from the company, a preferential issue will be made to the promoter group entity Risee Infinity Private Limited and other non-promoter entities Florintree Innovation LLP, Fortune Financial & Equities Services Private Limited. The issue will increase the promoter’s equity stake.
Former Blackstone executive Mathew Cyriac, investing via Florintree Innovation, and equity investor Nimish Shah, investing through Fortune Financial & Equities Services, will also be involved in the offer. Their combined contribution to Reliance Infrastructure for a minority interest is Rs 1,200 crore.
Over the last month, Reliance Infrastructure’s shares have surged by an astounding 60.5 percent. By contrast, throughout the same period, the benchmark Nifty 50 increased by 3.6 percent.
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