In the past two months, Jio Platforms, the company’s digital services subsidiary, has raised Rs 1.15 trillion, offering a 24.7 per cent stake to a clutch of global investors, including Facebook, marquee private equity firms, and sovereign wealth funds from Saudi Arabia and the UAE.
The company has included the entire proceeds of the Rs 53,124-crore rights issue, the biggest share offer in the country, in its calculation. However, it has received only 25 per cent of the issue proceeds (Rs 13,281 crore) in the ongoing financial year; the remaining 75 per cent would come in FY22.
When asked about actual fund infusion, an RIL executive said the company had signed definitive agreements for stake sale in Jio Platforms and shareholders had committed to subscribe to the rights issue. The fund infusion would happen after required approvals and in accordance with the timelines, he added. Along with the proposed stake sale in the petro-retail joint venture to BP, the funds raised would be in excess of Rs 1.75 trillion, the company said.
An IPO of the retail business and Jio is planned in five years, it added. As of March 2020, the company had a gross debt of Rs 3.36 trillion, and cash and cash equivalents of Rs 1.75 trillion.
“Exceeding the expectations of our shareholders and all other stakeholders, again and yet again, is in the very DNA of Reliance. Therefore, on the proud occasion of becoming a net debt-free company, I wish to assure them that Reliance in its golden decade will set even more ambitious growth goals, and achieve them,” Ambani said in a statement.
“Reliance turning net-debt free ahead of schedule is a positive catalyst and will help sustain the valuation. The Rs 1.68 trillion fundraising gives the company ability to invest and experiment in new business categories. No other Indian corporate is so well placed to tap new opportunities,” said Rajiv Sharma, head of research, SBICAP Securities.
RIL debt higher than reported: Analysts
Some analysts estimate RIL’s net debt to be higher than the reported Rs 1.61 trillion as of March 2020. Kotak Institutional Equities pegs the effective net debt at Rs 2.49 trillion after including capex creditors, deferred payment liabilities, and other financial liabilities. Likewise, IIFL pegs it at Rs 2.38 trillion, Bernstein at Rs 2.61 trillion, and CLSA at Rs 1.88 trillion. The estimates of Edelweiss Securities, in fact, are significantly higher. Edelweiss analysts led by Jal Irani, in a report last month, said that the adjusted net debt (after including non-convertible debentures extended to tower/fibre InvIT, creditor capex and spectrum liability) stood at Rs 3.2 trillion.