RIL seeks shareholders’ nod to raise ₹25,000 crore via debt
MUMBAI: Reliance Industries Ltd (RIL) has sought shareholders’ approval to raise as much as ₹25,000 crore through debt to meet capital expenditure, the firm said in a stock exchange notice.
RIL has listed this in its notice calling for an annual general meeting of the company to be held on July 21.
The firm has proposed to raise the amount through private placement of non-convertible debt instruments.
RIL’s consolidated debt rose to ₹1.96 lakh crore at the end of March, compared to ₹1.8 lakh crore a year ago.
Cash and cash equivalents at the end of the past fiscal year were at ₹77,226 crore, down from ₹89,969 crore in the year-ago period. Capital expenditure for the past fiscal year stood at ₹1.15 lakh crore.
Continued investments in its telecom unit, Reliance Jio Infocomm Ltd—where RIL has invested ₹1.79 lakh crore so far and has forecast to increase to ₹2.5 lakh crore by fiscal 2020— has meant a depletion in cash balances and increase in debt.
“Debt (is) higher on account of investments in Jio and refining,” V Srikanth, joint chief financial officer of RIL, said on April 24 at the time of announcing the company’s fourth quarter results.
“This fund-raise could either be for a deleveraging exercise or for further investments in Jio. With most of its investments done in refining and petrochemicals, RIL does not need such a huge fund-raise for its capital expenditure this fiscal,” said an analyst with a Mumbai-based brokerage on the condition of anonymity.
In January this year, the firm said Reliance Jio was planning to raise ₹30,000 crore from a rights offer, and will use the proceeds to enhance its network capacity.
In July 2016, Reliance Jio had issued ₹2,000-crore five-year non-convertible debentures for expanding the telecom business.
RIL has also sought approval for a proposal to alter the articles of association of the company to impose a ceiling of 5% on purchase of equity by non-promoters in its payments bank unit, Jio Payments Bank Ltd, till the time it remains as a promoter.
This is to ensure that the articles are in sync with the Reserve Bank of India’s (RBI) requirements.