RPower sought shareholders’ approval for raising funds through QIP…

Anil Ambani Group firm Reliance Power has sought the approval of shareholders to raise funds through sale of up to 25 per cent shares to institutional investors for funding projects.

It has also sought the nod for mopping up funds through issuing of securities in international markets, according to the company's annual report for 2010-11.

When contacted, a Reliance Group spokesperson said, "These are merely enabling resolutions that will remain valid till the next AGM, but there are no plans for making any QIP or other offering of securities at this time". Meanwhile, the proposed issue of QIP securities may be made in one or more tranches.

"... the aggregate amount raised by the issue shall not result in the increase of the issued and subscribed equity share capital of the company on the relevant date by more than 25 per cent of the then issued and subscribed equity shares of the company as on the relevant date," the report noted.

 
The proposed sale of securities in international markets would also have a ceiling of 25 per cent of then issued and subscribed equity shares.

Based on today's market capitalisation of Rs 23,422 crore, around 25 per cent stake in the company would be worth over Rs 5,850 crore.

Reliance Power on its own and through its subsidiaries has a planned portfolio of over 35,000 MW generation capacity, including both operational as well as projects under development.

"In order to part finance such a large portfolio of power projects and to enhance its global competitiveness and ability to compete with the peer groups in the domestic and international markets, the company needs to strengthen its financial position and net worth by augmenting its long-term resources," the report said.

In letter to shareholders, Reliance Power Chairman Anil Ambani said the company expects to commission 600-MW Rosa Phase-II project, the 600 MW Butibori project at Nagpur, Maharashtra and one unit of 3,960 MW Sasan Ultra Mega Power Project (UMPP) at Madhya Pradesh, by 2012.

"Besides, we shall commission the open cycle phase of India's largest gas based power project, the 2,400 MW project at Samalkot, in the current financial year and the combined cycle phase by the next year," Ambani wrote.

Reliance Power recorded a profit of Rs 760.44 crore in 2010-11.