Company officials had said during the announcement of the December quarter results that RIL had invested about Rs 1.4 trillion in its refining and petrochemicals business, another Rs 3 trillion in telecom and Rs 14,000 crore in the retail business. These businesses had expanded aggressively for seven years.
In a report last month, SBI CAP’s research co-head, Rajiv Sharma, said after the deleveraging of assets, RJio’s wireless business would have to pay for using use tower and fibre assets. “No doubt with this move Jio will see savings in depreciation and interest costs but some impact on Ebitda (operating earnings) cannot be ruled out,” he wrote.
There is also a possibility, wrote SBI CAP, of Jio raising its rates by 4-6 per cent.
Last month RIL announced its east-west gas pipeline (used by it for transporting gas) was being sold to an infrastructure fund sponsored by Brookfield for Rs 130 billion ($1.9 billion) under an InvIT structure.
Rating agency ICRA had reported that telecom companies
were divesting tower assets, with the latter likely to emerge as an independent business; hence, fibre assets were also being hived off to separate entities. It estimated the market value of fibre assets owned by the major private companies
at Rs 1.2 trillion. So, even some stake sale could generate enough to improve their liquidity.