Anil Ambani-owned stocks: Reliance Power, Reliance Infrastructure shares surge up to 125% in one year. More steam left?

A Stunning Comeback in Anil Ambani-Owned Stocks

Once considered struggling entities, Anil Ambani-led companies—Reliance Power and Reliance Infrastructure—have staged a remarkable turnaround in the past year. Investors have taken note of their impressive stock market performance, with Reliance Power gaining over 125% and Reliance Infrastructure surging nearly 90% in the last 12 months.

This rebound comes after years of underperformance and debt-related concerns. As these companies continue to deliver on operational restructuring, investor confidence appears to be making a comeback. The big question now: Is there more upside potential ahead?

Stock Performance Snapshot

• Reliance Power Ltd (NSE: RPOWER):

  • 1-Year Return: ↑ 125%

  • CMP (July 5): ₹28.90

  • 52-Week Low/High: ₹12.40 / ₹32.80

• Reliance Infrastructure Ltd (NSE: RELINFRA):

  • 1-Year Return: ↑ 87%

  • CMP (July 5): ₹233.15

  • 52-Week Low/High: ₹110.90 / ₹249.60

The recent surge is backed by a combination of debt resolution steps, capital infusion plans, and rising investor interest in undervalued mid-cap and infra plays.

What’s Driving the Rally?

1. Debt Restructuring and Clean-Up

Reliance Group companies have been aggressively working on deleveraging. In FY24, Reliance Power repaid a significant portion of its debt and reduced interest outflows. Reliance Infrastructure, on the other hand, has focused on monetizing non-core assets to bring down its liabilities.

“Market participants are responding positively to the visible efforts toward improving balance sheets. While the road is still long, the first steps are encouraging,” said Neeraj Agarwal, Senior Research Analyst at Axis Securities.

2. Strategic Stake Sales

Reliance Power recently signed term sheets with strategic investors to sell a stake in its renewable energy unit. This has not only raised hopes for capital infusion but also re-positioned the company in India’s fast-growing clean energy segment.

3. Government Infra Push

Reliance Infrastructure, with interests in EPC (engineering, procurement, and construction), transportation, and power distribution, stands to benefit from the Indian government’s multi-lakh crore infrastructure investments under the National Infrastructure Pipeline and PM Gati Shakti.

“Infra companies are cyclical, and with the current capex push by the government, RELINFRA may witness tailwinds,” noted Anita Kothari, Portfolio Manager at SMC Global Securities.

4. Retail Investor Buzz

Both stocks have found strong traction on retail investing platforms. High promoter holdings and low free float have added to volatility but also fueled sharp up-moves.

Caution Signs Remain

Despite the gains, market veterans caution that fundamental challenges persist.

• Limited Revenue Visibility:
  While restructuring is underway, earnings growth remains uneven and quarterly results have not yet fully justified the rally.

• Regulatory Risks:
  Infrastructure and power companies face continued regulatory hurdles including approval delays, payment disputes, and tariff revisions.

• Debt Overhang Not Fully Cleared:
  Although some progress has been made, both firms still carry high debt-to-equity ratios, raising questions about long-term sustainability.

According to a report by ICICI Direct, “The stock prices have run ahead of earnings. Unless there is a consistent uptick in project wins or asset monetization, valuations could appear stretched.”

Analyst Views: Mixed but Watching Closely

Market analysts remain divided on the outlook. While some see the potential for multi-year re-rating, others advise a wait-and-watch approach.

“These are turnaround stories. If execution is managed well, both stocks could see further rerating. However, one must tread cautiously given the speculative nature of the rally,”
— Vivek Sharma, Equity Strategist, Kotak Institutional Equities

“Reliance Power and RELINFRA are classic high-risk, high-reward stocks. Ideal for tactical exposure but not core portfolio bets until visibility on cash flows improves,”
— Sonal Jain, Independent Investment Advisor

Investor Outlook: Speculative But Rewarding

Both Reliance Power and Reliance Infrastructure are currently momentum plays. Investors with short- to medium-term horizons have benefited from the price surge. However, long-term positioning would require more confidence in earnings recovery, debt management, and sectoral stability.

Key Takeaways for Investors:

• Monitor debt reduction progress and stake sale outcomes.

• Track government infra orders and renewable energy developments.

• Watch quarterly earnings for signs of turnaround validation.

The spectacular comeback of Anil Ambani-owned stocks has drawn comparisons to earlier bull runs. While there's optimism driven by restructuring and policy tailwinds, prudent investors must weigh valuation risks and execution challenges before jumping in.

In essence, Reliance Power and Reliance Infrastructure offer a fascinating case of revival—but with caution lights flashing alongside the green.