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Reliance Power Ltd. witnessed a sharp decline in its share price on Monday after the Enforcement Directorate (ED) filed a chargesheet against the company and 10 other entities in a high-profile money laundering case. Shares of the Anil Ambani group company fell as much as 6.39%, closing at ₹35.28 per share on the BSE, reflecting market jitters over the latest legal developments.
Trading Volumes Surge Amid Price Drop
The decline in Reliance Power stock came alongside robust trading volumes, signaling heightened investor activity. Approximately 4 crore shares changed hands on stock exchanges on Monday, double the one-week average of 2 crore shares. The significant turnover underscores the market’s sensitivity to regulatory actions and potential legal risks involving major corporate entities.
Details of the ED Chargesheet
According to the ED, the chargesheet pertains to the issuance of an alleged fake bank guarantee of ₹68 crore, used to secure a tender from the Solar Energy Corporation of India Limited (SECI) on behalf of Reliance NU BESS Limited, a subsidiary of Reliance Power. Notably, Reliance NU BESS was formerly known as Maharashtra Energy Generation Limited.
The ED named several key individuals and entities in its complaint, including:
- Ashok Kumar Pal, former CFO of Reliance Power
- Subsidiaries: Reliance NU BESS Ltd and Rosa Power Supply Company Ltd
- Punit Narendra Garg, Reliance Group executive
- Amar Nath Dutta, trade financing consultant
- Corporate and individual accused: Biothane Chemicals Pvt Ltd, Ravinder Pal Singh Chadha, and Manoj Bhaiyasaheb Pongde
This filing represents a supplementary chargesheet. The ED had earlier targeted an Odisha-based “shell” company, Biswal Tradelink Private Limited, and its MD Patha Sarathi Biswal, in its initial chargesheet in this case.
Reliance Power Responds: Maintaining Innocence
In a regulatory filing dated 6 December, Reliance Power emphasized that its subsidiaries and employees acted bona-fide and are victims of fraud perpetrated by third parties.
The company stated:
“It is reiterated that the Company, Reliance Power Limited, its subsidiaries and its employees acted bona-fidely and are victims of a fraud, forgery, cheating and conspiracy committed by the third parties. The ED allegations have not yet passed through judicial scrutiny, and the company has not been found guilty of any wrongdoing.”
Reliance Power further reassured investors that the chargesheet does not affect its operations, adding:
“The company will get an opportunity to present its case before the court. Reliance Power Limited continues to operate normally, remaining fully committed to growth, operational excellence, and the creation of sustainable value for all stakeholders, including its community of over 43 lakh shareholders.”
Stock Performance: Recent Trends and Long-Term Gains
The share price history of Reliance Power reflects significant volatility. Over the past month, the stock has declined 10%, while its three-month fall totals 23%. Over six months, shares have plunged 43%, and year-to-date, the stock is down 21%.
Despite short-term declines, the stock has delivered substantial long-term gains. Over two years, Reliance Power shares have rallied 48%, surged 125% over three years, and generated multibagger returns of 846% over five years.
This historical performance indicates that while the stock reacts sharply to regulatory news, long-term investors have historically benefited from substantial appreciation, underscoring the company’s resilience amid legal and market turbulence.
Implications for Investors and the Market
The ED’s chargesheet highlights the increasing scrutiny of corporate governance and financial compliance in India. Cases involving alleged fake bank guarantees and money laundering raise concerns about the risk environment for publicly listed companies.
For market participants, the Reliance Power incident serves as a reminder that even well-established corporations can face legal and regulatory headwinds, affecting stock prices, liquidity, and investor confidence.
Despite the chargesheet, Reliance Power’s statement assures stakeholders that business operations remain unaffected, and the company continues to pursue growth and shareholder value.
