Reliance Power Hits 52-Week Low After ED Seizure

Reliance Power shares fell more than 3% to around Rs 19.11 in Thursday’s morning trade, touching a fresh 52-week low of Rs 19.06, after the Enforcement Directorate issued a provisional seizure order tied to a foreign exchange case. Under an order dated October 12, the ED seized shares of Sasan Power, Reliance Power’s wholly owned subsidiary, valued at Rs 2,026.65 crore, along with bank balances of Rs 6.16 crore, under Section 37A of FEMA. The probe relates to foreign currency convertible bonds issued in 2006 and an overseas investment in a Singapore subsidiary made in 2008. The company said the seizure is provisional and subject to confirmation by the Competent Authority, that it is assessing the implications, and that no penalty has been imposed so far. Sasan is a key operating asset in Reliance Power’s portfolio, so any action touching its shares draws investor attention. The seized shares have been pledged to Power Finance Corporation, a government-owned lender, for over a decade, which may limit practical impact, but the order adds legal uncertainty to a stock that has already struggled. Investors will watch whether the Competent Authority confirms the seizure and what the company says about its financial and operational impact. The stock has ranged between Rs 19.06 and Rs 47.75 over the past 52 weeks, down more than 50% over one year, with a market cap of around Rs 8,201 crore. Trading right at its yearly low, the stock now depends on clarity over the seizure’s outcome. Disclosure: Palash Kag, Proprietor, Sarathi Research (SEBI Reg. No. INH000012740). No position held in Reliance Power. This article is for educational and informational purposes only and does not constitute investment advice or a recommendation to buy, sell, or hold any security. Please consult a registered advisor before making investment decisions.