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Friday, March 31, 2023

Reliance debt free after Facebook, Saudi deals: Ambani

Mukesh Ambani has announced that his Reliance Group is now net debt free, which he termed an amazing achievement in lockdown. This came about due to Saudi investment, sale of stake in Jio to Facebook and because of selling newer shares.

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Indian tycoon Mukesh Ambani said Friday that his Reliance conglomerate is net debt free after raising more than $22 billion in a rights issue and selling stakes in its e-commerce unit to Facebook, Saudi Arabia’s wealth fund and others.

Asia’s richest man after upending the Indian telecoms market, Ambani is attempting to do the same in e-commerce with Jio Platforms, taking on US giants Amazon and Walmart in the vast market of 1.3 billion consumers.

Reliance is one of the most profitable companies in India, the largest publicly traded company in India by market capitalization, and the largest company in India as measured by revenue after recently surpassing the government-controlled Indian Oil Corporation. On 18 October 2007, Reliance Industries became the first Indian company to exceed $100 billion market capitalization.

Reliance debt free: Ambani says he has fulfilled promise to shareholders

“I have fulfilled my promise to the shareholders by making Reliance net debt-free much before our original schedule of 31st March 2021,” the chairman of the oil-to-telecoms giant said in a statement.

“I wish to assure them (shareholders) that Reliance in its Golden Decade will set even more ambitious growth goals, and achieve them,” he added.

Reliance has turned net debt free by raising Rs 168,818 crore in two months through the country’s largest ever rights issue and series of stake sale deals in its arm Jio Platforms, delivering on a promise given to shareholders in August last year.

Back in 2017, Ambani had said that the energy-to-telecom conglomerate was on the verge of a golden decade where it would yield the returns of its largest ever capacity expansion in its petrochemical business and its investment in Jio. With these investments, the company’s net-debt was at Rs 161,035 crore, as on March 31, and the funds raised in the last 58 days exceeded it. Along with the stake sale to BP in the petro-retail joint venture, the total fund raise is in excess of Rs 1.75 lakh crore.

Ambani, 63, lives in a 27-storey luxury Mumbai skyscraper believed to have cost more than $1 billion to build. For years he has been embroiled in an epic feud with his brother Anil Ambani.

Facebook sale and Saudi deal leave Reliance debt free

In April, Mumbai-based Reliance raised $5.7 billion by selling a 9.99-percent stake in Jio Platforms to Facebook, in one the biggest ever foreign investments in India.

Further deals quickly followed, including with Saudi Arabia’s sovereign wealth fund, the Abu Dhabi Investment Authority and private equity firm KKR.

Read more: Mukesh Ambani to battle Amazon, Walmart in e-commerce

To further its e-commerce ambitions, Reliance is also closing in on a stake in units of Future Group, which already has a partnership with Amazon, Bloomberg News reported on Thursday.

Shares in Reliance Industries were up almost four percent in Mumbai after the debt announcement.

Reliance group is in golden decade: Ambani 

Reliance Industries is now “in its golden decade”, said billionaire Mukesh Ambani as his group became net debt-free, much ahead of its original goal of achieving the status by the end of March 2021.

Over the past few weeks, oil-to-telecom conglomerate Reliance Industries’ rights issue of more than Rs 53,000 crore and investments of Rs 1.16 lakh crore in its digital services arm, Jio Platforms, from global companies including internet giant Facebook helped the group become net debt-free much before schedule.

Shares of Reliance Industries Ltd. traded 2.51 per cent up in Friday’s trade at 12:40PM (IST). Around 976,518 shares changed hands on the counter.

The scrip opened at Rs 1674.7 and touched an intraday high and low of Rs 1699.2 and Rs 1660.6, respectively, in the session so far. The stock of Reliance Industries Ltd. quoted a 52-week high of Rs 1699.2 and a 52-week low of Rs 867.11.

Total market cap of the Reliance Industries Ltd. stood at Rs 1144205.38 crore as of 19th June 2020.

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