Reliance Group Stock Falls 8% After SEBI Orders Audit Over Alleged Regulatory Violations

SYNOPSIS: SEBI has ordered a forensic audit into Reliance Power over alleged regulatory violations, while the company also disclosed the exit of its Head of Business and Legal, adding to investor concerns.

During Friday’s trading session, shares of one of India’s leading private sector power generation companies and part of the Reliance Group slumped around 8 percent to hit a new 52-week low. What led to the sharp fall? Here’s a closer look.

At 01:41 p.m., shares of Reliance Power Limited were trading in the red at Rs. 32 on BSE, down by around 4 percent, compared to its previous closing price of Rs. 33.21, with a market cap of Rs. 13,234 crores. The stock has delivered negative returns of over 22 percent in one year, and has fallen by around 8 percent in the last one month.

What’s the News

Reliance Power and Reliance Infrastructure, both part of the Anil Dhirubhai Ambani Group, often find themselves in the spotlight for regulatory or governance-related developments. This time too, the news flow around the group has turned unfavourable.

In its latest stock exchange disclosure, Reliance Power Limited informed investors that the capital market regulator Securities and Exchange Board of India (SEBI) has initiated a forensic audit of the company. The audit relates to alleged violations under the SEBI Act, the Securities Contracts (Regulation) Act, and the Companies Act.

Separately, the company also announced a senior management change. Manoj Pongde has stepped down from his role as Head of Business and Legal, effective 14th January. The update was shared in line with SEBI’s disclosure norms under Regulation 30.

Financials & More

Reliance Power reported a significant growth in revenue from operations, experiencing a year-on-year increase of over 12 percent, from Rs. 1,760 crores in Q2 FY25 to Rs. 1,974 crores in Q2 FY26. However, reported net profit fell sharply to Rs. 87 crore, compared with Rs. 2,878 crore in the year-ago quarter, primarily because Q2 FY25 included an exceptional gain of Rs. 3,230.42 crore from the deconsolidation of a subsidiary, which inflated profits in the base period.

Reliance Power Limited is primarily engaged in the business of generation of power, with projects including coal, gas, hydro, wind and solar based energy projects. The portfolio of the Reliance Power Group also includes Ultra Mega Power Projects (UMPPs).

The company has an operating generation portfolio of about 5,305 MW, comprising 5,160 MW of thermal capacity and 145 MW of renewable power. Its thermal assets include 3,960 MW at Sasan Power Limited (world’s largest integrated coal-based power plant), 1,200 MW at Rosa Power, and 5,160 MW captive coal-based projects. The company is also building future growth engines, with around 4,000 MW of renewable projects, ~770 MW of hydro projects, and ~6,500 MW of battery energy storage system (BESS) projects awarded under new initiatives.

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