Shares of Reliance Power surged by 5%, reaching the upper circuit limit of Rs 42.47 on the Bombay Stock Exchange (BSE) on Thursday. This increase followed the approval of a Rs 1,525 crore preferential issue by the company's shareholders.

The approval was secured through a postal ballot, with members endorsing a special resolution for the issuance of securities.

The company confirmed the successful approval of the resolution via an exchange filing, stating that the decision was made in accordance with Section 110 of the Companies Act, 2013, along with the Companies (Management and Administration) Rules, 2014.

The notice for the postal ballot was dated September 23, 2024, and included a corrigendum released on October 3, 2024. Notably, the proposal received overwhelming support, with 99.5% of the votes cast via postal ballot in favor of the resolution.

Through this preferential issue, Reliance Power plans to raise Rs 1,525 crore by issuing 46.20 crore equity shares or convertible warrants at a price of Rs 33 per share.

Reliance Infrastructure will contribute Rs 604 crore, while the remaining Rs 900 crore will come from two investors: Authum Investment and Infrastructure, which will invest Rs 720 crore, and Sanatan Financial Advisory Services, which will contribute Rs 200 crore.

This capital influx is set to increase Reliance Power’s net worth from Rs 11,155 crore to Rs 12,680 crore, allowing the company to operate with zero bank debt.

The proceeds from the preferential issue are intended to bolster Reliance Power’s activities in the renewable energy sector and will be used for business expansion, investment in subsidiaries and joint ventures, or general corporate purposes.

As of the cut-off date, the total number of shareholders stood at 41.01 lakh, and the resolution was passed under a special category.