Vijay Kedia Buys 40,00,000 Shares of Reliance Infrastructure; New Subsidiaries Incorporated
In a significant development for investors, renowned investor Vijay Kedia has made a substantial investment in Reliance Infrastructure Ltd. This article provides an in-depth look at this move, along with updates on the company’s new subsidiaries and recent market performance.
Market Performance and Share Price Movement
On Thursday, the stock market closed on a positive note, with the BSE Sensex Index rising by 0.93% and the NSE Nifty-50 Index gaining 0.89%. Amid this positive market sentiment, Reliance Infrastructure Ltd’s shares saw a significant uptick. The stock surged by 5.17% to reach ₹157.70 per share, up from its previous close of ₹149.95. The intraday trading saw a high of ₹161.95 and a low of ₹153. Notably, the stock has recovered impressively, climbing 20% from its 52-week low of ₹132.50 per share, although it is still below its 52-week high of ₹308.
Vijay Kedia’s Strategic Investment
Ace investor Vijay Kedia, through his firm Kedia Securities Pvt Ltd, acquired 40,00,000 shares of Reliance Infrastructure Ltd, amounting to a 1.01% stake in the company as of March 2024. This move underscores Kedia’s confidence in the company’s future prospects and potential for growth. Such a significant stake by a reputed investor is often seen as a positive signal by the market, potentially encouraging other investors to follow suit.
Incorporation of New Subsidiaries
Reliance Infrastructure Ltd has recently expanded its operational base by incorporating two new wholly-owned subsidiaries:
Reliance Risee Private Limited (RRPL)
Reliance Energy Limited (REL), a wholly-owned subsidiary of Reliance Infrastructure Ltd, has established Reliance Risee Private Limited (RRPL). With an authorized and paid-up share capital of ₹1,00,000, divided into 10,000 equity shares of ₹10 each, RRPL is set to explore new avenues in advisory and consultancy services related to engineering, technology, and commodities. Although currently without turnover or business operations, RRPL aims to carve out a niche in advising and dealing in various commodities and their derivatives. Notably, the incorporation of RRPL is not considered a related party transaction and does not require any governmental approvals.
Reliance Jai Private Limited (RJPL)
In addition to RRPL, REL has also set up Reliance Jai Private Limited (RJPL). RJPL mirrors RRPL in terms of its financial structure, with an authorized and paid-up share capital of ₹1,00,000. As a new entity, RJPL is focused on the infrastructure sector, with plans to manufacture and deal in infrastructure-related products. Its operational scope includes power generation stations, telecommunication network services, and other diverse infrastructure services. Like RRPL, the establishment of RJPL is not considered a related party transaction and does not necessitate government approvals.
About Reliance Infrastructure Ltd
Reliance Infrastructure Ltd is a leading Indian company with a significant presence in multiple sectors. The company operates through special-purpose vehicles, developing projects in power generation, transmission, distribution, and trading. Additionally, Reliance Infrastructure is actively involved in constructing and operating roads, metro systems, and airports, and even has a defense subsidiary. As the largest concessionaire under India’s National Highways Authority, the company’s engineering and construction arm offers turnkey solutions for power plants.
The company boasts a market capitalization of ₹6,247 crore and has shown a mixed performance in its Quarterly Results (Q4FY24) and annual results (FY24). The stock’s recovery from its 52-week low is a testament to its resilience and potential for growth. The shareholding pattern as of March 2024 indicates that the promoters hold 16.50%, Foreign Institutional Investors (FIIs) hold 11.77%, Domestic Institutional Investors (DIIs) hold 2.16%, the Government holds 0.02%, and the public & others own the remaining 69.55%.
Investment Considerations
For investors, Reliance Infrastructure Ltd presents a mix of opportunities and challenges. The company’s diversified portfolio across critical infrastructure sectors positions it well for long-term growth. Vijay Kedia’s substantial investment signals confidence in the company’s future, which could be an encouraging sign for prospective investors. However, it is essential to consider the mixed financial results and the ongoing market conditions before making investment decisions.
Conclusion
Vijay Kedia’s acquisition of a significant stake in Reliance Infrastructure Ltd, coupled with the incorporation of new subsidiaries, marks a notable development for the company. As the stock continues to recover from its 52-week low, investors will be keenly watching the company’s performance and strategic moves. Reliance Infrastructure’s diversified operations and strategic expansions underscore its potential for long-term growth in the infrastructure sector.
