Anil Ambani plans to raise whopping sum of Rs 17,600 crore to provide much-needed momentum to his business, especially the two flagship companies of his Reliance Group – Reliance Infrastructure and Reliance Power.
Anil Ambani, the estranged younger brother of Asia richest man, Mukesh Ambani, has been unlucky in his business ventures, to put it mildly. But lately, Anil Ambani has had a remarkable turn of fortunes of sorts, with his two major companies– Reliance Infrastructure Limited and Reliance Power Limited– one mired in debt, now undergoing a revival phase and almost becoming debt-free.
Riding his recent wave of successes, Anil Ambani now reportedly plans to raise whopping sum of Rs Rs 17,600 crore to provide much-needed momentum to his business, especially the two flagship companies of his Reliance Group – Reliance Infrastructure and Reliance Power. Speculations are rife that Mukesh Ambani’s younger brother is planning something big which will change the course of his business as well as the markets.
How Anil Ambani raised the funds?
As per reports, Anil Ambani’s Reliance Group recently announced that it has raised Rs 7,100 crore through equity-linked long-term FCCB from Värde Partners – a renowned global investment fund based in the United States. As per a company statement, the amount will be available for 10 years at a 5 percent interest rate.
Additionally, both Reliance Power and Reliance Infrastructure, aim to raise Rs 6,000 crore through Qualified Institutional Placement (QIP), the company said. Notably, the two companies announced to raise Rs 4,500 crore through preferential issue of equity shares in the last two weeks.
In total, Anil Ambani-led Reliance Group aims to raise Rs 17,600 crore, pending approval from shareholders which is expected by the end of October.
Anil Ambani big plan
According to Reliance Group officials, Anil Ambani plans to boost the valuation of both his companies as the current amount of Rs 17,600 crore is being raised with a favorable 70:30 debt-to-equity ratio. The strategy of raising funds through equity or equity-linked long-term bonds is expected to be very effective for the Reliance Group, which will provide it with necessary financial capital required for expanding its footprint, experts say.
As per analysts, the favorable debt-to-equity ratio will provide the Reliance Power and Reliance Infra with enough legroom to raise as much as Rs 50,000 crore in investments in the next few years which will take the market cap of these companies to Rs 25,000 crore each.
Reliance Group shares
Meanwhile, the share prices of Reliance Power, which currently stands at Rs 50.95, fell by 5% on Friday, following a 5% uptick for 11 days. Reliance Power has given around 170 percent returns this fiscal year. Reliance Group’s other major company, Reliance Infrastructure has also given around 128 percent returns to investors this years. Its shares are currently priced at Rs 300 due a downward trend since the past few days.
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