Reliance Power Stock Falls 31%: Is This a Buying Opportunity?

Reliance Power shares have plunged 31% over the past month, raising investor concern. This article delves into the drivers behind the decline, future prospects, and whether it’s time to accumulate or avoid the stock.

Why Is Reliance Power Falling?

Reliance Power share price has declined ~31% over the last month. Key reasons include:

Delay in commissioning of large power projects
Concerns over rising debt and cost overruns
Damp sentiment toward power sector and energy stocks
Overall liquidity drying up in mid- and small-cap space

Reliance Power: Business Overview

Reliance Power, part of the Reliance ADAG Group, operates across the energy value chain including:

Coal- and gas-based power generation
Solar and wind energy
Mining and utilities

Its marquee projects include two ultra mega power plants (~4,000 MW each) in Chhattisgarh, and growing solar capacity under development.

Share Price Performance & Metrics

Period	% Change
1 Week	-15%
1 Month	-31%
52‑Week Range	₹7.40 – ₹14.50

Recent trading volumes surged during the fall, suggesting institutional exit. The Debt-to-Equity ratio stands elevated (~1.8), and coverage ratios remain stretched.

Dip Buying or Stay Away?

Reasons to Buy:

Current valuation near historical lows
Long-term solar and power demand outlook favorable
Promised power plant capacity may begin operations soon

Risks to Consider:

Execution delays and further cost overruns

Rising coal, gas, and interest expense
Fragile power exchange prices
Liquidity constraints in debt-heavy companies

What Analysts Are Saying

Most analysts have downgraded their stance:

Neutral to Sell ratings at ₹7–8 target price
Advisories recommend waiting for clear revenue visibility before entry

Long-Term Outlook: More Than Just a Dip

Reliance Power’s ability to deliver on upcoming capacity targets—especially renewable energy—could be transformative in the medium term. But execution discipline and debt management will determine if it becomes a turnaround story or continues to lag.

Summary

While Reliance Power shares appear heavily beaten, this is not a simple bargain play. It’s more a test of confidence in project execution and sector recovery. Investors with high risk appetite may consider nibbling close to current levels, only after thorough due diligence.