Anil Ambani's Reliance Group secures Rs 17,600 crore for future growth plans

Anil Ambani-led Reliance Group is set to drive its future growth strategies with a significant Rs 17,600 crore fundraising, boosting the net worth of Reliance Infrastructure Ltd and Reliance Power Ltd to around Rs 25,000 crore.

Details of the Fundraise

In the last two weeks, Reliance Infrastructure Ltd and Reliance Power Ltd have announced major fundraising initiatives:

Preferential Issues: Both companies raised Rs 4,500 crore through preferential issues of equity shares.

Investment from Varde Partners: A further Rs 7,100 crore was secured through equity-linked long-term Foreign Currency Convertible Bonds (FCCBs) from Varde Partners. These bonds have a long maturity period of 10 years and a low-interest rate of 5 percent.

Qualified Institutional Placement (QIP): An additional Rs 6,000 crore will be raised via QIP, with each company aiming for Rs 3,000 crore.

Shareholder Approvals and Growth Strategy

The fundraising efforts have received resolutions and are awaiting shareholder approvals by the end of the month. A senior official highlighted that Reliance Group’s strategy to raise capital through equity or equity-linked bonds provides essential growth capital for expansion plans. With a conservative debt-to-equity ratio of 70:30, the Rs 17,600 crore raised will enable a total investment outlay of Rs 50,000 crore over the next few years.

Investment Details

According to stock exchange disclosures:

Preferential Issues: Rs 4,500 crore raised, with Rs 1,750 crore invested by promoters and Rs 3,750 crore by four major investors: Fortune Financial & Equities Services, Florintree Innovations LLP, Authum Investment and Infrastructure, and Sanatan Financial Advisory.

Varde Partners’ Contribution: Rs 7,100 crore through equity-linked FCCBs.

Future Outlook

These fundraising initiatives underscore the financial growth potential for both Reliance Infrastructure Ltd and Reliance Power Ltd, equipping them to execute their expansion strategies effectively.

With the financial engines now in place, Reliance Group is poised for robust growth and development in the coming years.