Reliance Power shares surged over 18% on Monday after the company announced its foray into artificial intelligence (AI), marking a significant diversification from its core power business. The stock hit an intraday high of ₹45.80 on the BSE, before settling at ₹44.20, up 18.2% from the previous close.
AI Venture Details
The company stated in a regulatory filing that it will invest ₹500 crore over the next three years to set up an AI research and development center in Bengaluru. The center will focus on developing AI solutions for energy optimization, predictive maintenance, and grid management. Reliance Power plans to leverage AI to enhance efficiency in its power plants and offer AI-as-a-service to other utilities.
According to a company spokesperson, “This move aligns with our vision to become a technology-driven energy company. AI will help us reduce operational costs by 15-20% and improve plant availability.” The announcement comes as part of the company's broader strategy to diversify beyond thermal power and into renewable energy and technology.
Market Reaction
The surge in share price was accompanied by heavy trading volumes, with over 10 million shares changing hands on the BSE, compared to the average daily volume of 2 million. Analysts attributed the rally to investor optimism about the company's pivot to high-growth sectors. “Reliance Power's entry into AI is a positive surprise. It opens up new revenue streams and reduces reliance on the volatile power sector,” said an analyst at Motilal Oswal.
However, some experts cautioned that the AI venture is still in its early stages and may take time to yield results. “The ₹500 crore investment is modest compared to peers, and execution risks remain. Investors should watch for tangible milestones,” noted a report from ICICI Securities.
Financial Performance
Reliance Power reported a net loss of ₹120 crore in the last quarter, impacted by lower power demand and fuel costs. The company has been under pressure to reduce debt, which stood at ₹12,000 crore as of March 2026. The AI foray is seen as part of a turnaround plan to improve profitability and reduce debt through higher-margin technology services.
The company's stock has been volatile over the past year, ranging from ₹25 to ₹55. Monday's gain brought the stock close to its 52-week high, reflecting renewed investor confidence.
