Reliance Infra shares see 4% jump today: What's fueling rally?
What's the story
Anil Ambani-owned Reliance Infrastructure's shares witnessed a significant spike today after India Ratings and Research upgraded its credit rating by three notches. The move comes after the company managed to reduce its debt to almost zero with banks and financial institutions, marking a major turnaround in its financial health. Following the rating upgrade, Reliance Infrastructure's shares surged 3.7% to hit an intraday high of ₹392 on the National Stock Exchange (NSE) today.
Rating
A look at the new rating
Reliance Infrastructure had announced the rating upgrade in a regulatory filing after market hours on Friday. The new rating ('IND D' to 'IND B/Stable/IND A4')applies to its existing non-fund-based working capital limits, and is a major boost for investor confidence in the firm.
Debt reduction
'Default' classification removed after 6 years
Along with the credit rating upgrade, India Ratings and Research also removed Reliance Infrastructure's 'Default' classification after six years. The agency credited this positive change to the company's aggressive debt reduction strategy. In its exchange filing, Reliance Infra said, "This upgrade represents a significant improvement of three notches in the Company's credit profile... The upgrade also reflects the Company's substantial deleveraging efforts."
Stock growth
The stock has jumped 105% in 1 year
Over the past year, Reliance Infrastructure's stock has jumped a whopping 105.67%. On a year-to-date (YTD) basis, it is up 22.81%. The last six months have seen a rise of 42.42%, while in three months, the stock has gained sharply by 56.67%. In one month alone, there is an uptick of 1.91% on the charts with stocks trading above their 50-day, 100-day, and 200-day exponential moving averages (EMAs).