Why Are Anil Ambani’s Reliance Power & Reliance Infra Surging Despite Weak Power Sector Sentiment?

Why Are Anil Ambani’s Reliance Power & Reliance Infra Surging Despite Weak Power Sector Sentiment?

 

Anil Ambani’s Reliance Power and Reliance Infrastructure are rallying on a mix of turnaround signals—debt clean‑up, court relief, fresh capital, and green‑energy/order wins—at a time when broader power sentiment remains cautious. The surge reflects a shift from pure speculation toward a “salvage‑to‑revival” narrative, with traders betting that repaired balance sheets and renewed project visibility can unlock leverage to any cyclical upturn in infra and utilities.​

How much have the stocks jumped?

• In mid‑2025, Reliance Power and Reliance Infrastructure clocked gains of roughly 60–70% over 12 months, sharply outperforming many power and infra peers that delivered far more modest returns.​

• One recent stretch saw Reliance Power up about 16% in just five sessions and Reliance Infra up over 10–11% as both repeatedly hit upper circuits amid heavy retail and trading‑desk activity.​

• On days when sector indices and benchmark Nifty traded flat to weak, these two names still rose 5–8%, underlining how stock‑specific catalysts, not sector tailwinds, are driving the move.​

Reliance Power: from distress to “energy transition” story

• Reliance Power’s rallies in 2025 have repeatedly coincided with announcements around renewable‑energy projects—solar, storage and green hydrogen—and upgrades or efficiency plans for thermal assets.​

• A recent example was a 350 MW solar plus 175 MW/700 MWh battery storage project win by subsidiary Reliance NU Energies, which sent the stock up over 11% in a single session and contributed to a 30% gain in May and about 140% over 12 months.​

• Commentary notes that the company has raised fresh equity through preferential issues and warrants to fund clean‑energy expansion, signalling a push to reposition itself from a leveraged conventional power play to a broader energy‑transition platform.​

These developments help investors look beyond legacy stress and value the optionality in new‑age projects, even as sector sentiment is clouded by fuel‑cost volatility and regulatory overhang.

Reliance Infrastructure: balance‑sheet repair and legal wins

• Reliance Infra’s stock has more than doubled over the last year in some periods, driven by dramatic deleveraging, improved credit ratings, and progress on old disputes.​

• The company cut standalone external debt with banks and institutions down to around ₹475 crore from about ₹3,800 crore, effectively turning debt‑free on a standalone basis and sharply improving its net worth.​

• In FY25, Reliance Infra reported a net profit of about ₹4,938 crore with EBITDA surging and the consolidated net debt‑to‑equity ratio dropping from 0.78x to 0.28x, showcasing a genuine financial turnaround rather than just cosmetic relief.​

The stock also benefited from regulatory and legal relief, including resolution of disputes tied to the Mumbai power business and the NCLAT halting insolvency proceedings after dues were cleared, which removed tail‑risk that had kept many investors away.​

Why the rally stands out despite sector weakness

• Power and infra as sectors remain weighed down by capex intensity, regulatory uncertainty, and periodic worries around tariffs, fuel linkages and state‑utility receivables, keeping broader indices subdued.​

• Against this backdrop, the ADAG names are rising because their stock‑specific news flow—debt cuts, capital infusion, project wins, insolvency withdrawals, rating upgrades—is far more dramatic than what most peers are delivering.​

• These are also low‑float, high‑beta counters where even moderate incremental institutional or HNI interest—along with retail momentum trading—can generate sharp short‑term moves once the “going concern” fear recedes.​

In essence, while the sector grapples with familiar structural issues, Reliance Power and Reliance Infra are experiencing a narrative re‑rating from survival to turnaround, making them outliers in an otherwise cautious power‑infra tape.

Risks that could still spoil the party

• A large chunk of recent profitability and balance‑sheet improvement reflects one‑time items—like asset sales, settlements or extraordinary income—in addition to operational gains, so sustainability hinges on consistent cash flows from core projects.​

• Both businesses still face execution, regulatory and counterparty risks, and past cycles show that ADAG rallies have often been followed by steep corrections once news flow cools or fresh concerns emerge.​

• For investors, that makes position sizing and risk management critical: these turnarounds may continue to outperform if the deleveraging and project pipeline stories keep progressing, but they remain high‑volatility trades rather than low‑risk sector proxies.