Reliance Industries Limited has announced that the company is now net debt-free post a record-breaking rights issue and sealing 11 back to back investment deals for Reliance Jio. The conglomerate has raised more than Rs 1.75 lakh crore adding the money raised from the stake sale to BP in their petro-retail joint venture.
RIL has achieved this feat almost 9 months before the deadline set for March 2021.
“I have fulfilled my promise to the shareholders by making Reliance net debt-free much before our original schedule of 31st March 2021,” Ambani said in a press statement.
He was bullish on the future of the conglomerate’s retail and telecom verticals namely Reliance Retail and Reliance Jio announcing that these consumer-facing businesses would account for as much as 50% of the company’s EBITDA in coming fiscals. RIL had reported total debt of Rs 154,478 crore at the end of the FY19 and Rs 161,035 crore as on 31 March 2020.
The fundraise was mostly propelled by the stake sale in the telecom vertical. The conglomerate received Rs 115,693.95 crore from eleven institutional investors in the past nine weeks for dilution of a total of 24.7% stake in Reliance Jio.
RIL also raised an additional Rs 53,124.20 crore through a rights issue of its shares. These issues were subscribed to 1.59 times, one of the largest ever by any non-financial entity in the last ten years.
In August 2019, the company had announced in its AGM that it had raised $ 990 million or Rs 7,000 crore from its stake sale to BP in their petro-retail joint venture. The UK based oil major had secured 49% in the JV which controls 1,400 petrol pumps run by RIL along with its aviation fuel operations at more than 30 airports across India.
RIL also faced hurdles during its planned fundraises. It had announced plans for the sale of a 20% stake in its petrochemical business to Saudi multinational petroleum and natural gas company ARAMCO in August last year. The deal, which was valued at around $15 billion, was delayed hampering RIL’s plans for debt reduction.
But the Ambani-led company steamed forward with staggering fundraises in Reliance Jio. Marking the largest deal in the Indian internet space, Jio scooped its very first funding of the sequential investments worth Rs 43,574 crore from Facebook for a 9.9% stake on April 22.
Since then, several blue-chip backers Vista Equity, General Atlantic, KKR, Silver Lake, Mubadala, Abu Dhabi Investment Authority, TPG, L Catterton, and Saudi Arabia’s wealth fund Public Investment Fund have also infused funds in Jio.
At the end of the latest deal, Jio Platforms’ equity valuation stood at Rs 4.91 lakh crore while its enterprise valuation neared Rs 5.16 lakh crore.
