Reliance Industries becomes net debt free. What's next for Ambani?
RIL said that globally, the combined capital it raised in such a short time has no precedence, especially as this was amid the COVID-19 pandemic.
Mukesh Ambani-owned Reliance Industries Limited (RIL) has become net debt-free, following the record investments it received from some of the world’s top financial investors.
The group announced that the achievement comes eight months ahead of its March 2021 target.
RIL had raised Rs 115,693.95 crore from investors in Jio, and another Rs 53,124.20 crore from a rights issue. Subscribed 1.59 times, the rights issue was the largest in the world by a non-financial entity in the last ten years.
“Along with the stake sale to BP in the petro-retail JV, the total funds raised is in excess of Rs1.75 lakh crore. Our net-debt was Rs 161,035 crore, as on 31st March 2020. With these investments, RIL has become net debt-free," RIL said in a release.
"The combined capital raised has no precedence globally in such a short time. Both of these are also unprecedented in Indian corporate history and have set new benchmarks. This is even more remarkable that this was achieved amidst a global lockdown caused by the COVID-19 pandemic." it said.
The share prices of RIL have increased by 1.68 per cent to scale a new record high of Rs 1,684 on Friday. The RIL stock price has risen 9.39 per cent so far this year, even when the benchmark S&P BSE Sensex index has fallen 17.08 per cent.
Within nine weeks starting from April 22, Reliance Industries has sold a total 24.70 per cent stake in Jio Platforms in 11 deals for Rs 1,15,693.95 crore. The biggest capital infusion of Rs 43,573.62 crore for a 9.99 per cent stake in Jio Platforms was committed by Facebook.
The Mumbai based company has also sold 24.7% of Jio Platforms to global investors including General Atlantic, KKR, Saudi sovereign wealth fund and Abu Dhabi state fund, raising a total of $15.22 billion.
Strong investor interest in Reliance’s consumer businesses, Jio Platforms and Reliance Retail, will help the two units move toward a public listing in the next five years, company chairman and billionaire tycoon Mukesh Ambani said in a statement.
"I have fulfilled my promise to the shareholders by making Reliance net-debt free much before our original schedule of March 31, 2021," Ambani said in a statement.
Reliance’s retail unit runs close to 12,000 stores, including cash-and-carry wholesale, in over 6,700 Indian cities. Last month, it launched an online grocery service, JioMart, in a move aimed at rivalling Amazon’s local unit and Walmart’s Flipkart.
It plans to wrap up a bulk of the private fundraising for Jio Platforms - the unit which houses telecoms venture Jio Infocomm - by the third quarter of 2020 and then explore a potential public listing for it in the United States in 2021, according to news agency Reuters.
"I wish to assure them that Reliance in its Golden Decade will set even more ambitious growth goals, and achieve them, in fulfilment of the vision of our Founder, Dhirubhai Ambani, to consistently increase our contribution to India’s prosperity and inclusive development," Ambani said.
Reliance’s Jio Infocomm is India’s biggest telecom carrier by subscribers with more than 376 million users.
Unlike traditional carriers, Jio launched in late 2016 with free voice and cut-price data plans. It has also ventured into music and movie streaming apps.
The company has driven consolidation in India’s crowded telecoms sector, forcing several rivals out of business.
(With inputs from Reuters)