Reliance Power shares have hit a 5 percent lower circuit for the third consecutive session, driven by profit-booking following a remarkable 60 percent surge last month. This surge came after the company declared itself debt-free, attracting significant investor interest.
As of October 7, the stock is now trading 11 percent below its recent 52-week high of Rs 53.64, achieved just last week.
The recent decline in Reliance Power's stock reflects a broader market sell-off, prompting investors to take profits after the sharp rise. The stock's impressive performance in the past month was largely fueled by positive sentiment surrounding the company's announcement that it had become debt-free.
On September 18, these sentiments were bolstered when Reliance Power disclosed that it had been released from all obligations related to the outstanding debt of its subsidiary, Vidarbha Industries Power Limited (VIPL), amounting to Rs 3,872.04 crore.
In addition to this announcement, Reliance Power settled disputes with CFM Asset Reconstruction Private Limited, allowing the complete release of its corporate guarantee tied to VIPL.
Before these developments, the company had also secured a significant Battery Storage Contract of 500 MW/1000 MWh from the Solar Energy Corporation of India, positioning it as a key player in one of the world’s largest standalone battery energy storage projects.
From a technical standpoint, Reliance Power shares are currently trading above their 5-day, 50-day, 100-day, and 200-day moving averages (DMAs).
The stock's relative strength index (RSI) is at 79, indicating that it is in the overbought territory. As of 1:22 PM, Reliance Power shares were locked at a 5 percent lower circuit, trading at Rs 48.40 on the NSE.
Despite the recent downturn, the stock has shown impressive growth, rising approximately 102 percent year-to-date, significantly outperforming the benchmark Nifty's return of 15 percent.
Over the past 12 months, Reliance Power has rallied 172 percent, effectively more than doubling investors' money, while the Nifty has gained around 28 percent during the same timeframe.
