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Equipped with ₹17,600 crore fundraising and a zero-debt status, Anil Ambani's Reliance Group companies — Reliance Infrastructure Ltd and Reliance Power Ltd — are poised to execute their growth strategies, according to officials.
In the past two weeks, both companies have announced raising ₹4,500 crore through preferential issues of equity shares and ₹7,100 crore from global investment fund Varde Partners through equity-linked long-term FCCBs, having a long maturity period of 10 years and low interest rate of 5 per cent.
An additional ₹6,000 crore will be raised through qualified institutional placement (QIP), with Reliance Power and Reliance Infrastructure each aiming for ₹3,000 crore.
“With resolutions in place, shareholder approvals are expected by the end of the month,” officials said.
A senior official of the group stated that Reliance Group's strategy of raising capital through equity or equity-linked long-term bonds will offer the group companies essential growth capital for their expansion plans.
Even with a conservative debt-to-equity ratio of 70:30, raising over ₹17,000 crore in equity or equity-linked bonds will provide the group companies with a total investment outlay of ₹50,000 crore for their future business plans over the next few years.
The fundraising will also boost the net worth of both companies to around ₹25,000 crore.
According to stock exchange disclosures, both companies are raising ₹4,500 crore through preferential issues of equity shares. Of this, ₹1,750 crore will be invested by the promoters, while the remaining ₹3,750 crore is being contributed by four major investors -- Fortune Financial & Equities Services, Florintree Innovations LLP, Authum Investment and Infrastructure, and Sanatan Financial Advisory.
In addition, Varde Partners is investing ₹7,100 crore, through equity-linked foreign currency convertible bonds (FCCB). These equity-linked FCCBs have a long maturity period of 10 years and a low interest rate of 5 per cent.
These fundraising plans indicate that the financial growth engines in both companies are in place, the officials added.
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