SUMMARY
- Anil Ambani-owned Reliance Infrastructure and Reliance Power have achieved a debt-free status and secured a funding of Rs 17,600 crore.
- They have secured Rs 4,500 crore through preferential equity shares and Rs 7,100 crore from Varde Partners.
- This strategy is expected to enable a total investment of Rs 50,000 crore for future ventures.
Anil Ambani-owned Reliance Infrastructure and Reliance Power are set for a significant improvement in their financial situations, following their achievement of a debt-free status and securing a funding of Rs 17,600 crore. This news was shared by PTI on October 6, based on statements from company officials.
In the past few weeks, they have managed to secure additional funding of Rs 4,500 crore through preferential equity shares and an extra Rs 7,100 crore from a global investment firm, Varde Partners. This investment is in the form of equity-linked foreign currency convertible bonds (FCCBs) with a maturity of 10 years and an interest rate of just 5%.
Both entities are aiming to raise Rs 6,000 crore further through qualified institutional placement (QIP), with each company setting a target of Rs 3,000 crore.
This strategy is expected to enable a total investment of Rs 50,000 crore for future ventures. The goal is to increase their combined value to approximately Rs 25,000 crore.
The fundraising include Rs 4,500 crore from preferential equity shares, with Rs 1,750 crore coming from the promoters and an additional Rs 3,750 crore from four key investors: Fortune Financial & Equities Services, Florintree Innovations LLP, Authum Investment and Infrastructure, and Sanatan Financial Advisory.
Even with a cautious debt-to-equity ratio of 70:30, securing over Rs 17,000 crore in equity or equity-linked bonds will provide the group companies with a total investment budget of Rs 50,000 crore for their upcoming business strategies over the next few years.
The Rs 7,100 crore investment from Varde Partners in FCCBs is a key component of their funding strategy.
A senior official from the Reliance Group has stated that this approach will provide much-needed capital for growth.
According to PTI, the equity-linked FCCBs have a long maturity period of 10 years and a low interest rate of 5%.
Company representatives have shared that these actions are a strong indication of the financial backing for the growth initiatives of the two companies involved.
