1. About the Company
Reliance Power Ltd. (RPower) is a power generation company under the Reliance Anil Dhirubhai Ambani Group (ADAG).
Its asset portfolio spans:
- Thermal power – including the 3,960 MW Sasan Ultra Mega Power Project (Madhya Pradesh) and the 1,200 MW Rosa Power Project (Uttar Pradesh).
- Renewables – Solar, wind, battery storage, and upcoming hydroelectric power projects.
- Total Installed Capacity – ~5,305 MW (operational).
RPower also has a pipeline of renewable and storage projects, including one of India’s largest solar-plus-battery storage initiatives.
2. Valuation & Key Financial Metrics
(Mid-2025 estimates)
| Metric | Value / Comment |
| Market Capitalisation | ₹13,000–₹14,000 crore |
| Share Price | ~₹40–₹45 |
| Price-to-Earnings (P/E) | ~5.7 (undervalued vs peers) |
| Price-to-Book (P/B) | ~1.1 |
| Debt-to-Equity Ratio | ~0.88 (Mar 2025) – improved from 1.61 in FY24 |
| Interest Coverage Ratio | Improved sharply (profit turnaround) |
| Net Profit (FY25) | ₹2,948 crore (vs losses in previous years) |
| Sales Growth (5Y CAGR) | ~0% — stagnant historically but seen improving |
| Operating Margin | ~30% in latest quarter (vs 2.4% earlier) |
3. How RPower Reduced Debt by ~₹5,300 Crore in FY25
A multi-pronged deleveraging strategy drove a steep debt reduction in the last year:
- Subsidiary Prepayments
- Rosa Power prepaid over ₹1,300 crore to lenders (Varde Partners, etc.), becoming a zero-debt company.
- Sasan Power made a one-time bullet repayment of ₹1,285 crore to IIFCL (UK).
- Rosa Power prepaid over ₹1,300 crore to lenders (Varde Partners, etc.), becoming a zero-debt company.
- Asset Monetisation
- Sale of a 45 MW wind power project and the development rights for a hydro project (~₹1,000+ crore proceeds).
- Sale of a 45 MW wind power project and the development rights for a hydro project (~₹1,000+ crore proceeds).
- Legacy Settlements
- Resolved ₹3,872 crore guarantee linked to Vidarbha Industries Power Ltd (VIPL).
- Resolved ₹3,872 crore guarantee linked to Vidarbha Industries Power Ltd (VIPL).
- Capital Infusion
- Promoter & investor-backed preferential issues/warrants, raising over ₹1,500 crore to fund repayments.
- Promoter & investor-backed preferential issues/warrants, raising over ₹1,500 crore to fund repayments.
- Operational Improvements
- Stronger cash flows from Sasan and Rosa plants supported servicing and retiring debt.
- Stronger cash flows from Sasan and Rosa plants supported servicing and retiring debt.
End Result:
Debt-to-equity ratio fell from 1.61 to 0.88, and bank debt at the standalone level was eliminated by March 2025.
4. Peer Comparison Snapshot
| Parameter | Reliance Power | NTPC | POWERGRID | ADANIPOWER |
| Market Cap (₹Cr) | ~14,000 | 3,22,000+ | 2,64,000+ | 2,24,000+ |
| P/E Ratio | 5.7 | 13.75 | 17.05 | 17.31 |
| P/B Ratio | 1.1 | 1.88 | 2.92 | 3.69 |
| ROE (%) | Improving | 12.61 | 17.39 | 28.69 |
| Debt to Equity Ratio | 0.88 | 0.49 | 0.08 | N/A |
| Sales Growth (5Y %) | ~0.0% | 11.4 | 3.94 | N/A |
| Net Profit Margin (%) | Positive Turnaround | 12.57 | 33.9 | 22.68 |
5. ED Investigation & Promoter Linkage
- The Enforcement Directorate (ED) is investigating a large-scale alleged loan fraud (~₹17,000–₹24,000 crore) involving multiple ADAG companies, including Reliance Power and Reliance Infrastructure.
- Allegations relate to diversion of bank loans (e.g., from Yes Bank) through complex routes via related parties/shell companies.
- Risee Infinity Pvt Ltd – a promoter entity directly linked to Anil Ambani – is part of the broader ED probe (active more in Reliance Infrastructure capital infusions).
- As of now, Sasan Power and Rosa Power have not been directly named as investigation targets.
- Company stance: ED activity has had no material impact on operations or financial performance; full cooperation continues.
6. Sales Growth Outlook & Management Commentary
Historical Challenge: 5-year sales growth has been stagnant (~0%), despite steady plant availability, due to limited capacity addition and no major tariff hikes.
Forward Plans:
- Expand renewable capacity (solar, battery storage, hydro) in line with India’s 500 GW non-fossil 2030 target.
- Execute capex via the approved ₹9,000 crore fund-raising plan (₹6,000 crore equity, ₹3,000 crore NCDs).
- Accelerate growth in clean energy while optimising existing thermal assets.
Management Commentary:
- Confident of building significant green energy capacity.
- Priority on debt reduction, balance sheet strengthening, and stable cash flows.
- Emphasis on business independence from other group entities under ED lens.
7. Risks to Watch
- Regulatory Overhang: Outcome of ED investigation into promoter group could influence sentiment.
- Project Execution: Delays in renewable projects could stall growth.
- Market Sentiment: Current stock trend is bearish — entry is better post bullish technical confirmation.
8. Conclusion
Reliance Power is undergoing a financial turnaround — moving from negative earnings and high leverage to profitability and healthier balance sheet metrics. Debt cleanup was led by subsidiary loan prepayments (Rosa & Sasan), asset sales, and capital raising.
That said:
- Sales growth revival will depend heavily on renewable expansion execution.
- Legal uncertainty from ED investigations into the promoter group remains the biggest overhang.
- Currently, the stock is showing bearish signals.
Investor Takeaway:
It may be wise to track ED investigation developments and wait for bullish technical signals before accumulating. If regulatory clarity is achieved and growth projects start delivering revenues, Reliance Power could trade at significantly higher valuations given its improved fundamentals and undervalued multiples relative to peers.
