Masterstroke by Anil Ambani as he gets ready to raise Rs 176000000000 for…

Anil Ambani’s Reliance Infrastructure Ltd and Reliance Power Ltd are all set to scale up, aiming to accumulate a whopping Rs 17,600 crore funds without any external liabilities. They have a comprehensive fundraising plan – issuing equity shares worth Rs 4,500 crore, syncing with Varde Partners to gather Rs 7,100 crore through Foreign Currency Convertible Bonds (FCCBs), and amassing Rs 6,000 crore via a Qualified Institutional Placement (QIP).



Updated: October 6, 2024 3:45 PM IST


By Joy Pillai

anil
Masterstroke by Anil Ambani as he gets ready to raise Rs 176000000000 for…

Anil Ambani’s conglomerate Reliance Group, with subsidiaries – Reliance Infrastructure Ltd and Reliance Power Ltd, is poised for expansion. Supported by a successful fundraising effort that garnered Rs 17,600 crore and their freedom from debt, the Economic Times reported citing company officials. Notably, in recent weeks, Reliance Infrastructure and Reliance Power announced that they’ve amassed a whopping 4,500 crores through preferential share equity issues. Additionally, the companies obtained another 7,100 crores from the well-known global investment entity, Varde Partners. This amount was gathered through Foreign Currency Convertible Bonds, commonly referred to as FCCBs. These bonds have a decade-long maturity duration and an appealingly low interest rate of just 5 percent.

Anil Ambani will raise an additional Rs 6000 crore via qualified institutional placement (QIP), with both companies aiming for Rs 3,000 crore each. shareholder approvals are expected by the end of the month, officials told the Economic Times.

According to a senior official, Reliance Group’s strategy of raising money via shares or long-term bonds linked to shares will supply the essential resources for the growth plans.

The group companies, with a conservative approach, have maintained a 70:30 ratio for their debt to equity. By raising above Rs 17,000 crore through shares or bonds linked to shares, they are paving the way to reach an investment sum of Rs 50,000 crore. This enormous amount is for their future business undertakings planned for the forthcoming years.

Notably, this fundraising will also increase the net worth of reliance infrastructure and Reliance power by around Rs 25,000 crore respectively.
Statements from the stock market reveal that both companies aim to collect Rs 4,500 crore via a special offering of equity shares. The promoters will chip in Rs 1,750 crore of the total. The balance, Rs 3,750 crore, will be contributed by four primary investors: Fortune Financial & Equities Services, Florintree Innovations LLP, Authum Investment and Infrastructure, and Sanatan Financial Advisory.

Additionally, Varde Partners is going to invest Rs 7,000 crore via FCCB. These equity-linked FCCBs are equipped with a low interest rate of 5 percent and a long maturity period of 10 years.

These fundraising activities indicate that both companies – Reliance Infra and Reliance Power have set up a solid framework for financial growth.




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