People

The People Running Reliance Power

Governance grade: D+. A loss-making, promoter-controlled utility whose former CFO is in ED custody, whose board churned through five resignations in a single month, whose tender bank guarantee was forged, and which is now under a SEBI-ordered forensic audit — but whose new CEO is a 21-year operational insider running real assets and whose books carry no auditor qualification. Trust the operators in the plant; do not trust the architecture above them.

1. The People Running This Company

The board has effectively been rebuilt in the last 18 months. Five directors resigned together on 15 November 2024, a new CEO arrived in January 2025, the CFO was arrested and replaced in October 2025, and a "Board of Management" was bolted on in November 2025 to push governance further down into the operating layer. The names that matter today are a small cluster of operators (Parakh, Mohapatra) and a stack of retired bureaucrats and a former LIC chairman whose role is to validate, not to drive.

The asset-level operators (Parakh, Mohapatra) are the credible part of this story — they have actually built and run multi-gigawatt plants. The independent directors are credentialed but inherited a battlefield: of the four audit-committee independents, two missed half or all of their CSR-committee meetings in FY25. The promoter is invisible on paper (Ambani has been off the board for over three years) but visible everywhere in headlines.

2. What They Get Paid

Compensation is unusually small for a company of this size, and that is the most truthful thing about it: this is a turnaround vehicle that cannot afford market-rate executive comp and is using a brand-new ESOP-2024 scheme as the alignment mechanism instead.

The CEO is paid roughly ₹32 lakh ($38K) in a year the company posted a ₹128.14 crore standalone loss. That is one-fifteenth of what an Indian-market peer median CEO earns and, more importantly, smaller than the bank guarantee that is now subject of an ED chargesheet. Pay is not the problem here. The problem is that there is also no equity granted yet — the Reliance Power Employee Stock Option Scheme 2024 was only approved by postal ballot in November 2024, and as of the FY25 AR no grants have been disclosed to KMPs. Until ESOPs are granted and vested, the CEO has no economic skin.

3. Are They Aligned?

This is where the story breaks down. Promoter holding is technically 24.98% — but the Ambani family directly owns essentially nothing, the corporate-vehicle promoter is itself under ED attachment, and a major group entity (Reliance Capital) has just been reclassified out of the promoter group following its IBC resolution. Meanwhile retail public ownership is 57.75% — these are the people actually wearing the risk.

Ownership and control

The promoter line jumped from 23.27% to 24.98% in mid-2025 when 18.31 crore warrants converted to RInfra; FIIs added almost 700 bps over three years. The dropout is retail — fewer households want this risk. The actual Ambani family holding sums to roughly 18.4 lakh shares — about 0.04% — out of the 24.98% promoter block. The control is corporate, not personal, and the corporate vehicle (Reliance Infrastructure) is itself under ED asset attachment as of November 2025.

Dilution: warrants, ESOPs, and a forfeiture

The capital-raise pattern is the most economically significant alignment fact in this report.

The headline is the April 2026 forfeiture of 12.5 crore warrants that never converted. The upfront 25% (about ₹103 crore) was kept by the company under SEBI rules — a quiet positive — but the optical message is unambiguous: somebody was unwilling to put up the balance ₹309 crore at ₹33 per share, even with the stock recovering above the strike. That counterparty's identity matters; the company's filings have not specified which of the three preferential allottees walked away.

Related parties and self-dealing

The Reliance Group's history of inter-company receivables, write-downs, and 2021 vintage Mumbai Police FIRs against RInfra/RPower for "diversion of funds" is the elephant in the audit committee. The FY25 AR claims "no materially significant related party transactions" — that is the standard boilerplate, and the ED's December 2025 supplementary chargesheet against Reliance NU BESS and Rosa Power Supply (both 100% subsidiaries) directly tests it. Independent verification of arm's-length pricing inside this group is impossible from public disclosure.

Skin-in-the-game score: 3/10

The promoter holds 24.98% on paper but the family directly holds 0.04%. The CEO and CFO have not yet been granted equity. The non-promoter warrant allottees largely walked away. There is no capital-allocation discipline visible in pre-FY25 history (Tilaiya, Krishnapatnam, Chitrangi, Samalkot — every flagship project either shelved or rescued). The standalone debt-free claim (FY25) and the $150M Sasan bullet repayment (Dec 2024) are the only genuine alignment-positive actions in the recent record.

4. Board Quality

On paper this looks like a credentialed independent board — a former LIC chairman, a former TRAI member, a former PNGRB member, a former first-woman Chairperson of Coal India. In practice the board has had to triage a CFO arrest, a SEBI forensic audit, and an ED chargesheet inside one fiscal year, while half the audit committee skipped most CSR-committee meetings.

What is missing: there is no director with a deep restructuring/distressed-credit background despite the company having spent five years untangling debt — Piramal IBC case (settled at ~₹300 cr principal), CFM ARC, Varde Partners, the Sasan repayment. There is no director with renewables-execution experience despite the company's whole stated future being a 2.5 GW solar / 2.5 GWh BESS pipeline. The audit committee has zero forensic-accounting specialist after the secretarial auditor's "no fraud reported" stamp landed three months before the ED arrested the CFO.

Compliance lapses that actually matter: SEBI levied a ₹1 crore penalty in June 2024 for non-submission of "No Default Statements" to credit rating agencies (July 2017 to June 2019 — paid). The secretarial audit reports themselves are clean for FY25. Auditor (Pathak H.D. & Associates LLP) is in its final term; the audit committee will need to handle the rotation in the same year as the SEBI forensic audit — a stressed combination.

5. The Verdict

The grade: D+.

The strongest positives. The standalone balance sheet is now debt-free and Sasan is operating at over 90% PLF — the operating layer of this company is genuinely fixed. CEO Parakh is a 21-year insider who has actually built the assets that are now generating cash. The independent chair is a former regulator and the audit committee includes a former LIC chairman. ESOP-2024 is in place if the board chooses to grant. There is no auditor qualification or going-concern flag.

The real concerns. The former CFO is in ED custody. A SEBI forensic audit is open. SECI has debarred the company from solar tenders for three years. The supplementary ED chargesheet names two 100%-owned subsidiaries. The board lost five directors in one day in November 2024. The Ambani family directly owns essentially nothing, but the corporate-promoter block is itself under ED asset attachment and Reliance Capital was just reclassified out of the promoter group via an IBC resolution. The CEO has been paid ₹32 lakh and granted no equity. The 12.5 crore warrant tranche just lapsed.

What would force an upgrade. SEBI forensic-audit conclusion finding no material wrongdoing plus a properly-sized ESOP grant to the new CEO and CFO at strike near current price plus clean closure of the SECI debarment — any one of these is helpful, all three would re-rate the governance grade to B–.

What would force a downgrade. A forensic-audit finding of material related-party diversion, an ED action that names the listed entity itself (rather than subsidiaries), or any further senior-management arrest. A second consecutive year of no equity grants would also signal that the new management is not really in charge.