Mukesh Ambani’s Reliance Industries becomes debt-free, raises Rs 1.68 trillion

Ambani had announced the target of making the group net-debt free at Reliance Industries’ 42nd annual general meeting in August 2019

Reliance Industries announced that it has raised over Rs 1,68,818 crore in 58 days, putting up account investments of Rs 1,15,693.95 crore in its digital services arm Jio and Rs 53,124.20 crore through the issue of rights. With these investments, the group said it has become net debt-free that stood at Rs 1,61,035 crore as of March 31, 2020.

After this announcement, RIL shares reached a one-year high of ₹1,788.60 — up almost 8 per cent from the last close. RIL shares ended up 6.25 per cent at ₹1,759.

Reliance Industries also added that the combined capital boosted so far including the rights issue and sale of a stake in Jio – has no importance globally in such a short time. The group said that both are also remarkable in the country’s corporate history and that it is

“Even more remarkable than this was achieved amidst a global lockdown caused by the COVID-19 pandemic”.

Reasons behind reliance industries becoming debt-free

Digital services arm, Jio Platforms, from global companies including internet giant Facebook helped the group become net debt-free much before schedule.

Earlier this month, Reliance Industries’ rights issue was subscribed 1.59 times, which the company said was “not only the largest ever in India but also the largest in the world by a non-financial entity in the last ten years”. The company sold a total of 24.7 per cent stake in Jio Platforms in 11 deals for Rs 1,15,693.95 crore within nine weeks beginning April 22.

Out of these 11 deals, Facebook made the biggest capital intake of Rs 43,573.62 crore for a 9.99 per cent stake in Jio Platforms, which houses Reliance Industries’ telecoms arm Reliance Jio Infocomm. The internet major was followed by US-based private capital firms Vista and KKR, and Saudi Arabia’s Public Investment Fund, each of which took a 2.32 per cent stake in Jio Platforms for Rs 11,367 crore.

Ambani had announced the target of making the group net-debt free at Reliance Industries’ 42nd annual general meeting in August 2019, saying the group has “a very clear road map” to make it happen within the next 18 months.

As the stock price of Reliance Industries fell 25 per cent in two months, Mr.Ambani’s net worth chopped down to $300 million each day, falling to $48 billion. Ambani slipped to the 17th position on the Hurun Global Rich List.

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

Written by Kanishtha Singh, a Mass Communication student at Makhanlal Chaturvedi University(MCU), Bhopal. Interested in covering women, political and international issues.

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