Anil Ambani-backed stocks are on the rise—Should you invest?
What's the story
The stocks of Anil Dhirubhai Ambani Group (ADAG), including Reliance Home Finance, Reliance Infrastructure, and Reliance Power, have witnessed a massive spike in value today.
Reliance Home Finance shares jumped 10% to ₹3.63 each, while Reliance Power shares jumped 18.5% to hit a six-month high at ₹52.82.
Reliance Infrastructure shares also rose 10% to ₹311 per share on Friday's trade on the stock market.
Partnerships
Strategic partnerships fuel ADAG stock surge
The sharp rise in ADAG stocks can be credited to a series of positive developments that have boosted investor sentiment and resulted in a sharp increase in trading volumes.
Reliance Infrastructure's subsidiary Reliance Defence recently entered into a strategic alliance with Dusseldorf-based Rheinmetall AG in the ammunition sector.
This is Reliance Defence's third major collaboration after successful alliances with Dassault Aviation and France's Thales Group.
Manufacturing facility
New manufacturing facility to support defense collaboration
To back its new partnership, Reliance Defence will set up a Greenfield manufacturing facility in the Watad Industrial Area of Ratnagiri, Maharashtra.
The company said this state-of-the-art facility will play a major role in supplying India's armed forces and help meet India's ambitious defense export target of ₹50,000 crore by 2029.
This announcement has further fueled the surge in ADAG stocks today.
Strategic ventures
Reliance Power's stock performance and strategic ventures
Reliance Power's stock has also been on investors' radar owing to multiple positive developments.
The company recently completed a preferential allotment of equity shares worth ₹43.89 crore to two entities — Reliance Infrastructure Limited and Basera Home Finance Private Limited.
It also announced an international partnership with Druk Holding and Investments Limited (DHI), the investment arm of the Royal Government of Bhutan, for developing Bhutan's largest solar power project with a proposed capacity of 500 MW.
Financial recovery
Reliance Power's clean energy pipeline and financial recovery
With 2.5 GWp of solar and over 2.5 GWh of BESS in its clean energy pipeline, Reliance Power is India's largest player in the integrated solar + BESS segment.
The company's financial performance in the March quarter has also piqued renewed investor interest.
For the quarter, it posted a consolidated net profit of ₹126 crore, a massive recovery from a loss of ₹397.56 crore last year due to lower finance costs and reduced operating expenses.