Reliance Power clarifies on report of enforcement agency action

Reliance Power clarifies on report of enforcement agency action

Reliance Power, a subsidiary of the Reliance Group, has issued a statement in response to recent actions by the Enforcement Directorate (ED) in an ongoing probe into alleged loan fraud involving Yes Bank. The ED conducted searches at numerous locations linked to Anil Ambani, the younger brother of billionaire Mukesh Ambani, as part of its investigation into suspected money laundering and diversion of funds [1].

In its statement, Reliance Power emphasized that the company is fully cooperating with the ED and is committed to resolving any issues that may arise from the investigation. The company stated that it is working closely with the authorities to provide all necessary information and documents to facilitate a thorough and expeditious investigation.

The ED's probe centers around allegations that Anil Ambani's Reliance Group entities orchestrated a scheme to siphon off bank loans worth Rs 3,000 crore from Yes Bank between 2017 and 2019, with the funds allegedly diverted to shell companies and other group entities [2]. The probe also uncovered gross violations in Yes Bank’s loan approval process, including back-dated documentation, disbursement of loans on or before approval dates, and absence of due diligence.

Reliance Power's shares fell by up to 4% on Thursday, July 24, following the ED raids [2]. However, the company maintains that the recent actions by the ED do not impact its ongoing operations or financial performance. The company has reported profit in back-to-back quarters, with a net profit of Rs 44.68 crore in Q1FY26, marking another profitable quarter [3].

The broader fallout of the raids and the ongoing probe weighed on investor sentiment surrounding Anil Ambani-led group entities, triggering a sell-off in both Reliance Infra and Reliance Power shares. However, Reliance Power has attributed its turnaround to strong operational performance, including high plant load factors at its Sasan and Rosa power plants, and its leadership in the Solar + BESS segment [3].

Reliance Power has consistently maintained a strong capital structure, with one of the lowest debt-to-equity ratios in the industry. The company has also reported significant revenue growth and EBITDA margins, reflecting its robust financial performance [3].

In conclusion, while the ED's probe into alleged loan fraud involving Anil Ambani's Reliance Group entities has raised concerns, Reliance Power has reiterated its commitment to transparency and cooperation with the authorities. The company's recent financial performance and operational achievements underscore its resilience and potential for long-term growth.

References:
[1] https://www.zawya.com/en/world/indian-sub-continent/indias-financial-crime-agency-probes-anil-ambanis-reliance-group-source-says-nj3ed074
[2] https://m.economictimes.com/markets/stocks/news/reliance-infra-reliance-power-shares-drop-up-to-4-after-ed-raids-sites-linked-to-anil-ambani/articleshow/122874450.cms
[3] https://www.financialexpress.com/business/industry-whats-powering-reliance-powers-turnaround-from-deal-wins-to-clearing-debt-3922027/