In three days, from September 18 to 20, the group announced that it has achieved almost zero debt and that it is implementing a long-term plan. fundraising plans that are said to solidify its financial position.
Reliance InfrastructureThe company’s board of directors approved raising funds of up to Rs 6,000 crore through preferential issue and QIP, while Power of trust The board will meet on September 23 to consider and approve fundraising through multiple avenues.
The speed with which Anil Ambani acted to pay off his companies’ debt while simultaneously announcing and executing fundraising plans for future expansion of his companies has surprised investors.
Shares of both companies rose on the stock markets.
The promoter group’s announcement to invest Rs 1,100 crore in Anil Ambani’s flagship company Reliance Infrastructure has further boosted investor confidence in the group’s revival plans and its long-term growth history, investors said.Anil Ambani’s twin strategy of debt reductionTogether with the raising of new capital, it has set the stage for a long-term transformation of the Reliance Group, they believe.Reliance Infrastructure‘s market capitalization By the end of this week, it had surged nearly 50 per cent from Rs 8.5 billion to Rs 12.5 billion.
Similarly, Reliance Power’s market capitalisation rose over 25 per cent from Rs 11,500 crore to Rs 14,600 crore.
Reliance Infra announced a significant reduction in its standalone external debt, bringing it down from Rs 3,831 crore to just Rs 4,750 crore. This was achieved by settling outstanding debts with major lenders such as Life Insurance Corporation of India (LIC), Edelweiss Arch, ICICI Bankand Union Bankaccording to documents presented by the company.
The measure indicates a solid financial recovery and improves Reliance Infra’s financial flexibility.
In addition, the board of Reliance Infra approved a preferential issue to raise Rs 3,014 crore, increasing the stake of Risee Infinity Pvt Ltd, a promoter group entity, along with other investors such as Florintree Innovation LLP and Fortune Financial & Equities Services Pvt Ltd.
The board also approved seeking shareholders’ permission to raise an additional Rs 3,000 crore through a qualified institutional placement.
This will provide additional capital to strengthen the balance sheet and invest in new growth opportunities.
With these fund infusions, Reliance Infra’s net worth is expected to rise from over Rs 9,000 crore to over Rs 12,000 crore, the documents said.
The company is now well positioned to invest in high-growth sectors, investors said.
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