🪞At a Glance
From a 2008 IPO that made headlines to 2025’s unexpected 100% rally, Reliance Power is the financial version of Kyunki Saas Bhi Kabhi Bahu Thi — everyone thought it was over, but it’s still airing. Losses? Check. Debt? Check. Hopeful solar dreams? Double check. Investors are confused: is this Anil Ambani’s redemption arc or just another false dawn?
🧠 Part 1: Once a Powerhouse, Now a Penny Drama
Back in the 2010s, Reliance Power was supposed to be India’s energy crown jewel:
- 5,945 MW capacity (5,760 MW thermal, 185 MW renewable)
- Mega Sasan UMPP project
- IPO oversubscribed 73x (yes, seventy-three times — the madness was real)
Then came:
- Overleverage 💸
- Missed deadlines 📉
- Supreme Court coal scam shocker 🧨
- And of course, Debt Bhai Debt became the slogan.
Stock crashed from ₹400+ to ₹5. Yes, ₹5.
📊 Part 2: 5-Year Financial Recap – Light at the End of the Tunnel?
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 7,934 | 7,503 | 7,514 | 7,893 | 7,583 |
| EBITDA (₹ Cr) | 3,575 | 2,735 | 1,886 | 1,160 | 2,108 |
| EBITDA Margin | 45% | 36% | 25% | 15% | 28% |
| PAT (₹ Cr) | 454 | -915 | -403 | -2,068 | 2,948* (👀) |
| Debt (₹ Cr) | 25,635 | 23,129 | 21,236 | 18,766 | 15,153 |
| Equity Dilution | ₹2,805 Cr | ₹3,400 Cr | ₹3,735 Cr | ₹4,017 Cr | ₹4,017 Cr |
*Includes ₹3,905 Cr “Other Income” – more on that in a minute.
💣 Part 3: The Shocking Truth Behind FY25 Profits 💣
Wait, they reported ₹2,948 Cr PAT in FY25? After years of losses?
🧾 Turns out:
- ₹3,905 Cr was “other income” (likely accounting adjustments, asset sales, or settlement gains)
- Core business is still barely breaking even
- Without that, FY25 would’ve been another loss-making year
This is not a comeback. It’s a spreadsheet magic trick worthy of a CA Final exam question.
🧮 Part 4: Operating Metrics – A Broken Grid?
- Sales growth 5Y CAGR: 0.05%
- Profit 5Y CAGR: Just 7% (largely inflated by FY25 bump)
- ROE 5Y avg: -7%
- Interest payments FY25: ₹2,056 Cr
- Promoter holding: Stuck at ~24% for 3 years
📉 Book value is ₹40.7, but earnings don’t justify it.
And yet… the stock is up 103% YoY, trading at ₹63.60.
⚡ Part 5: Greenwashing the Ambani Way?
Despite the red flags, Reliance Power is trying to become India’s solar Cinderella:
Recent Announcements:
- ☀️ ₹2,000 Cr investment in 500 MW solar project in Bhutan
- 🔋 Won 350 MW solar + 175 MW battery storage from SECI at ₹3.33/kWh
- 📈 Multiple preferential allotments to fund capex & reduce debt
But here’s the twist:
- Still zero dividend payout in 12 years
- Still heavily dependent on thermal
- Still paying ₹2,000+ Cr in interest annually
This isn’t a green company. It’s an old thermal company wearing green lipstick.
🧼 Part 6: EduInvesting Red Flags 🚩
| 🚩 Red Flag | Status |
|---|---|
| Heavy Debt | ₹15,153 Cr (down, but still painful) |
| Massive “Other Income” | ₹3,905 Cr in FY25 |
| No core profit in 3 years | 2018 was the last legit PAT year |
| Equity Dilution | ~₹1,200 Cr worth in 3 years |
| Zero Dividend | For over a decade |
| Promoter Holding | Stagnant at 24.98% |
🔍 Part 7: Fair Value Calculation – Let’s Not Kid Ourselves
Let’s assume:
- FY26 EPS = ₹1.5 (assuming real profit, not accounting drama)
- Assign P/E of 10x (generous for stressed infra)
| Scenario | EPS | P/E | FV |
|---|---|---|---|
| Base Case | ₹1.5 | 10x | ₹15 |
| Bull Case | ₹2 | 12x | ₹24 |
🎯 EduInvesting Fair Value Range = ₹15 – ₹24
Current Price = ₹63.60
🚨 This is nearly 3x above fair value, unless solar magic kicks in very soon.
🛍️ TL;DR – Reliance Power in a Sentence?
Anil Ambani’s last surviving empire — lit by “other income” and shareholder hope.
- Stock up 103% YoY, but core profits remain unstable
- ₹2,948 Cr PAT in FY25 = illusion powered by ₹3,905 Cr other income
- ₹2,000+ Cr annual interest burden still intact
- Massive solar projects announced — execution TBD
- Promoter stake stagnant, no dividends, frequent dilutions
🚦 Verdict:
Reliance Power is not an energy turnaround story — it’s an investor psychology case study. If the solar projects execute well and debt continues to reduce, maybe the stock deserves its new lease on life.
Until then? Riding this is like powering your house on a candle. Unreliable, dramatic, but surprisingly popular.
✍️ Written by Prashant | 📅 June 18, 2025
Tags: Reliance Power stock review, Anil Ambani, RPower fair value, solar projects India, EduInvesting, penny stock rally, renewable energy, SECI battery deal, Reliance Power debt
