Why is Reliance Power Share Falling? Check Key Reasons

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Reliance Power Company: As of 28th October, the Reliance Power Ltd. share price is down to Rs 44.46, a 0.38% decrease. The stock has reversed a five-day decline, outperforming its sector by 0.60% over the past month, which depends on the trends of the stock market that are prevailing under the economic conditions. Over the past week, the reliance power share has decreased to 0.54%. Over the last month, it has fallen by 0.76%, despite a slight decrease in investor participation, with delivery volume dropping by 2.02% relative to the 5-day average. The stock remains liquid enough for trading. 

The decline came after the Central Bureau of Investigation (CBI) searched Anil Ambani’s Mumbai home and the Reliance Communications office. The case is linked to an alleged ₹2,929 crore bank fraud, as per a complaint filed by the State Bank of India. Reliance Power is a major player in India, developing and operating power projects using both traditional and renewable energy sources. The market capitalisation of Reliance Power is approximately ₹18,457.95 crore, with the P/E ratio of 5.95 and the P/B ratio of 1.13. 

Key Reasons for Decline in the Share Price of Reliance Power Company

There are several reasons the share price of Reliance Power Company has been falling, including loan fraud allegations, global and geopolitical events, ED investigations, Poor Cash flow, Low Investor confidence, and revenue decline.  

Below are the reasons for the decline in the Reliance Power Share Price

• Loan fraud allegations: Reliance Power’s share price has been declining over the last month, following reports that the Enforcement Directorate (ED) raided Anil Ambani group companies as part of a money laundering investigation into a ₹30 billion (bn) bank loan fraud.
• Global and geopolitical events: Global and geopolitical events also affect the share price of Reliance Power in a negative way. If there is low power consumption, then it affects the share price of the company. 
• ED investigation: The company and its chairman have faced high regulatory criteria from the Enforcement Directorate over allegations of a ₹17,000 crore loan fraud, leading to a sharp drop in the share price. 
• Poor Cash: The company has shown a declining trend in cash flow in its core business, a weakness for investors evaluating its financial health, and other factors that affect the share price of Reliance Power Company.
• Rising Interest Rates: Prospects of delayed US interest rate cuts have led to capital outflows from emerging markets like India. This reduces liability in the Indian market and puts downward pressure on stock valuations across the board.
• Revenue Declining: The company have experienced a decline in revenue for the first three years and a significant impact on the share price of the reliance power share price, and it shows the low strength in the operational system of the company.

Reliance Power: An Overview

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Reliance Power Limited (R-Power), formerly Reliance Energy Generation Limited (REGL), is a part of the Reliance Group. It was established to develop, construct, operate and maintain power projects in the Indian and international markets. Reliance Infrastructure, an Indian private-sector power utility company, and the Reliance ADA Group promote Reliance Power. On 2nd February 2011, the United Nations registered the Reliance Power Sasan Power Plant as eligible to earn carbon credits for new projects.  

Reliance Power Ltd. was founded on 17th January 1995, with its headquarters in DAXC, Navi Mumbai. The company reported an operating income of ₹2,977.62 crore, a net income of ₹228.63 crore, and total revenue of ₹8,419.88 crore. Reliance Natural Resources merged with Reliance Power in 2010, shortly after its Initial Public Offering (IPO). 

Reliance Power Company: Performance Analysis

In the broader market context, Reliance Power has significantly outperformed the benchmark, with a one-year return of -0.25% compared to the Sensex’s decline of 0.73%. The market capitalisation is ₹18,520, and the Institutional holding for the current quarter is 16.8%. The net profit growth in the quarter increased by 145.7%. Reliance Power’s share price has dropped 11.5% over the past five trading sessions but is up 91% over the last year. The stock touched its 52-week high of ₹76.5 on 11th June 2025 and a 52-week low of ₹28.2 last year. The book value of the company is ₹40.7, and the ROE is -1.08, with a face value of ₹10.

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Reliance Power Company: Share Price Target

The share price target for Reliance Power is 46,75, with a price-to-book value of 1.3, negative operating revenue growth of -6.4%, operating profit of 30%, and an annual ROA of 7.1%. The industry P/E Ratio for this company is 29.98, the P/B Ratio is 6.77, and the book value is 110.09. The stock is trading at a discount to its peers’ average historical valuations. While the stock has generated a return of 13.55%, its profit has fallen by 12.89%.    

What are the Future Predictions of Analysts

The Reliance Power Company plans to invest over ₹100 bn in a solar power project manufacturing facility in Andhra Pradesh. It plans to increase its focus on renewable energy, particularly solar and wind power, due to the rising demand for clean energy. Reliance Power is also exploring green hydrogen opportunities and plans to invest in smart grids and energy storage. Reliance Power’s stock crash has raised concerns among investors who had been hoping for a turnaround in Anil Ambani’s group. However, experts believe investors are reacting to the news and that the stock will soon resume trading on its fundamental and technical strengths.

In its website analysis, Relianc Power has a durability score of 70 on a scale of 100, indicating high financial strength. 

Analysts Ratings

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• According to TipRanks, the consensus rating for Reliance Power shares is hold.
• The 12-month average analyst price target is ₹50,000, implying about 12.6% upside from its recent trading levels. 
• On AI-driven models, it also shows a Neutral sentiment, and which means the rating may be less robust than for more widely covered companies.

What is the Right Time to Buy Reliance Power Company’s Shares?

According to analysts, Reliance Power’s share price is determined by market factors. The share price has decreased due to internal company factors, as discussed above. Therefore, investors must review all factors before investing in Reliance Power Company. There are some factors to consider before investing in Reliance Power Company shares.

• Strong Fundamentals: Investors should review Reliance Power Company’s fundamentals before investing. If a company has strong fundamentals, high profitability, and good management, then investors should invest in it.    
• Financing Partnerships: Financing partnerships bridge the gap between customers and financial institutions, facilitating the distribution of a wide range of products and generating positive sales revenue for many consumers.   
• Growth in the Power Energy Sector: The company is well-positioned in the hydro energy sector to deliver benefits to Reliance Power Company. This dominant sector increases demand and prices for Reliance Power.
• Highly Volatile: Prices are highly volatile, so price changes have a significant impact on Reliance Power Company stock prices. Investors must review the market structure before investing in Reliance Power Company shares. 

Is It Good to buy Reliance Power Company shares?

Before deciding whether to invest in Reliance Power Company shares, investors must analyse the strong long-term prospects against its current high valuation. The Reliance Power Company stock is highly profitable in the long term. It could be a reasonable addition to a portfolio, especially when investors are willing to stabilise their portfolio’s risk profile. It is also a government-backed company with a promising dividend yield amid aggressive growth.

On the other hand, investors must assess the company’s financial growth and prospects, its current market valuation, and the project risks and debt before investing in Reliance Power Company shares.  

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Conclusion

A combination of broader market conditions, rising interest rates, and specific operational and valuation concerns drives the recent decline in Reliance Power’s share price. However, these short-term pressures exist within the context of a company operating in line with India’s long-term energy transition. Reliance Power’s aggressive expansion into renewable energy and EV infrastructure, combined with its solid financial fundamentals, high future growth, and rising interest rates, makes it a strong choice. 

Amid market volatility, many experts view the current decline as a buying opportunity, suggesting a strong underlying cycle ahead. The case is linked to an alleged ₹2,929 crore bank fraud, as per a complaint filed by the State Bank of India. Reliance Power is a major player in India, developing and operating power projects using both traditional and renewable energy sources. According to analysts, Reliance Power’s share price is determined by market factors. The share price has decreased due to internal company factors, as discussed above. Therefore, investors must review all factors before investing in Reliance Power Company. 

FAQs

What are the key reasons for the decline in the reliance power shares?

Ans. There are several reasons the share price of Reliance Power Company has been falling, including loan fraud allegations, global and geopolitical events, ED investigations, Poor Cash flow, Low Investor confidence, and revenue decline. Reliance Power’s share price has been declining over the last month, following reports that the Enforcement Directorate (ED) raided Anil Ambani group companies as part of a money laundering investigation into a ₹30 billion (bn) bank loan fraud.

Can Reliance Power’s pivot to renewables revive investor confidence?

Ans. While the renewable push reflects strategic intent, legacy legal issues, debt, and weak execution continue to neglect growth prospects, making recovery uncertain. Investor optimism may remain limited until the company proves consistent delivery and governance.

How did the promoter shareholding affect investor control?

Ans. Promoters held 90% of the post-IPO shares, leaving retail and institutional investors with limited influence. SEBI extended the promoter lock-in period to 5 years to ensure accountability. High promoter control meant strategic decisions were mainly insulated from public shareholders’ concerns. 

What are the factors to consider before investing in the Reliance Power shares?

Ans. Investors should review Reliance Power Company’s fundamentals before investing. If a company has strong fundamentals, high profitability, and good management, then investors should invest in it. The company is well-positioned in the hydro energy sector to deliver benefits to Reliance Power Company. This dominant sector increases demand and prices for Reliance Power.

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