Reliance Infra shares jump 7% following outcome of Rs 780 crore arbitration case; here’s what the analysts say

Shares of Reliance Infrastructure Ltd saw a significant rise in Monday’s trade after the company said it had won an arbitration case worth Rs 780 crore. The stock surged 6.80 per cent to hit a daily high of Rs 344.90. It was last seen up 6.21 percent at Rs 343. At this price, the stock is up 67.52 percent in a month.

The BSE and NSE Stock Exchanges have placed Reliance Infra securities under the ASM (Additional Surveillance Measure) framework for the short term. Stock exchanges place stocks in short-term or long-term ASM frameworks to warn investors about high volatility in stock prices.

Anil Ambani’s company informed stock exchanges that the Calcutta High Court has upheld an arbitration award of Rs 780 crore in favor of the company in a dispute with West Bengal-based Damodar Valley Corporation. The company had won a contract to set up a 1,200 MW thermal power plant in Purulia, West Bengal, for a sum of Rs 3,750 crore.

“We inform that on September 27, 2024, the Division Bench of the Calcutta High Court delivered its judgment in a petition filed by Damodar Valley Corporation (DVC) challenging the arbitral award under Section 34, dated September 29, 2023., amounting to approximately Rs 780 crore, including interest accrued in favor of the company in respect of the Raghunathpur thermal power project,” it said.

In another development, Reliance Infra’s board said it will consider raising funds from domestic or global markets on October 1 (Tuesday).

A few analysts have widely suggested that the stock looks “bullish” but “overbought” on the daily charts. Investors with a long-term view may consider holding on to it.

“The stock looked range bound at current levels. Investors with a long-term view may consider holding on to it,” said Kranthi Bathini, director of equity strategy at WealthMills Securities.

“Trend analysis on daily time frames indicates a significant increase in price action following a breakout of the volatility contraction pattern. This trend suggests a potential increase in smart money participation, reflecting signs We recommend buying the stock for a target price of 410, maintaining a stop loss at Rs 317,” said Kushal Gandhi, technical analyst at StoxBox.

“Reliance Infrastructure stock price is bullish but also very overbought on the daily charts with the next resistance at Rs 373. Investors are likely to book profits at current levels as a daily close below the support of Rs 322 could lead at a downside target of Rs 273 in the near term,” said AR Ramachandran, registered research analyst at Sebi.

RInfra is engaged in providing EPC, power distribution services in Delhi as well as implementation, operation and maintenance of several projects in the defense sector and in infrastructure areas such as Metro , toll roads and airports. She also executed the Mumbai Metro Line One project. As of June 2024, the promoters held a 16.50% stake in the company.