Reliance Infrastructure, under the leadership of Anil Ambani, has recently captured attention with the announcement of a merger with its fully-owned subsidiary, Reliance Velocity Limited (RVL). Following this news, the company’s stock experienced a remarkable surge, climbing over 12% within just five days. However, in today’s market session, the shares faced a 2% decline after a streak of three days of gains.

Overview of the Merger

On March 8, Reliance Infrastructure’s board sanctioned the merger with RVL, aiming to enhance operational efficiency and streamline its business structure. The merger is pending approval from regulatory authorities, including the National Company Law Tribunal (NCLT).

In an official statement, the company expressed that this strategic move is designed to simplify its operations and ultimately deliver increased value to its shareholders.

"The Board of Directors has approved the Scheme of Arrangement, facilitating the amalgamation of RVL with Reliance Infrastructure. This Scheme is subject to required statutory approvals, including that of the Hon’ble NCLT, Mumbai Bench," the company disclosed in its exchange filing on March 8.

Stock Performance: A Volatile Journey

Reliance Infrastructure’s stock has experienced a turbulent period, witnessing a 14% spike last week. However, the broader trend has been quite mixed.

• In the past month, the stock has seen a decrease of 18%.
• Over the last six months, it managed to post an 8% increase.
• Year-to-date (YTD), the shares are down nearly 30%, but there has been a slight 4% increase over the last year.

Currently priced at around Rs 234, the stock is trading 33% lower than its 52-week peak of Rs 351, yet it remains 62% above its 52-week low of Rs 144.45. The market capitalization of Reliance Infrastructure stands at approximately Rs 9,280 crore.

Q3 Earnings Report

In its financial results for Q3 of FY25, Reliance Infrastructure reported a 24% decrease in net profit, which fell to Rs 2.74 crore from Rs 3.62 crore the previous year. Revenue also saw a decline of 9.4%, amounting to Rs 18.60 crore. The drop in earnings has been attributed primarily to reduced utilization of its infrastructure assets.

This merger and the fluctuations in stock performance highlight the dynamic nature of Reliance Infrastructure’s strategic initiatives and market presence. As the company moves forward, all eyes will be on the regulatory approval process and how it impacts future growth trajectories.