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Anil Ambani group firm Reliance Power may finally announce its maiden dividend payment.
In a stock exchange notification on Wednesday, the company said its board of directors will meet on Monday (November 9) to consider giving a maiden interim dividend to its shareholders. Currently, the company has a little over 37 lakh retail investors.
Since its IPO in 2008, the company has not announced a dividend payment. However, immediately after the public issue, the company had announced bonus shares to the non-promoter category, with a view to protect them from the impact of a sharp slide in the share price.
Reliance Power came out with an initial public offering at ₹450 a share, raising ₹11,500 crore, one of the biggest IPOs in Indian history.
The company announced three bonus shares for every five shares held in the company. But that amounts to hardly anything for retail investors, as the share price has been on the downward slope. In fact, in August this year, the stock registered its all-time low of ₹33.10. The stock of Wednesday closed at ₹51.40, up 3.94 per cent, on the BSE.
In 2010, Reliance Power merged another group company Reliance Natural Resources with itself.
Slew of positivesHowever, after hitting the low, the stock has been on the recovery path, thanks to a slew of positive news flows.
A few days ago, the Delhi High Court had quashed the Delhi Government’s plea for an audit of power distribution companies in the national capital by the Comptroller and Auditor General (CAG).
On Monday, the company had reported 36.57 per cent jump in net profit to ₹345.63 crore for the quarter ended September 30, on higher electricity generation as against ₹253.07 crore posted in the year-ago period. Total income also increased to ₹2,766 crore (₹1,783.24 crore).
For the first half of the current fiscal (April-September), consolidated net profit rose 38.7 per cent to ₹689.97 crore (₹497.42 crore).
Govt’s thrust helpsThe government’s thrust on major power sector reforms has also revived the sentiment. However, a retail investor, who bought the shares immediately after the IPO from the secondary market, said he is sitting on a huge loss, despite cost-averaging the share in the last few years, as the stock has been hitting new lows with each passing year.
“More than a dividend, if the stock price revives quickly I would be happy,” he said and added he wish to hold the stock for quite long-term.
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