On Wednesday, December 4, Reliance Power’s stock saw a sharp rise, hitting the upper circuit limit of 5%. This surge came after the Solar Energy Corporation of India (SECI) decided to withdraw a ban it had placed on the company.
By around 11 am, Reliance Power shares were trading at Rs 41.09. So far this year, the stock has gained nearly 72%, significantly outperforming the Nifty 50 index, which has only risen by 13%.
Impact of SECI’s Ban and Legal Developments
Despite the strong year-to-date performance, Reliance Power’s stock faced challenges in the past two months. It fell 12% in October and another 9% in November.
However, the company clarified in a statement to stock exchanges on December 3 that the SECI’s ban notice had been withdrawn with immediate effect.
This decision allows Reliance Power and its subsidiaries (except Reliance NU BESS, formerly Maharashtra Energy Generation) to participate in SECI tenders.
The company emphasized that this withdrawal followed legal proceedings but noted that SECI could take further action if necessary.
SECI, a government-owned company, is responsible for implementing renewable energy projects.
On November 6, SECI had banned Reliance Power and Reliance NU BESS from participating in its tenders for three years, accusing the companies of submitting “fake documents.”
SECI also issued a show-cause notice on November 13, questioning why criminal action should not be taken against Reliance NU BESS for allegedly submitting fake bank guarantees.
Financial Performance
In the most recent quarter (September), Reliance Power reported a significant increase in consolidated net profit, which reached Rs 2,878.2 crore, compared to Rs 237.76 crore in the same quarter last year.
However, the company’s total income during this period decreased to Rs 1,962.77 crore, down from Rs 2,116.37 crore in the previous quarter.
