On Friday, Reliance Industries Limited, India’s most valuable group managed to become debt-free. The company managed to raise Rs. 168,818 crores over the last eight weeks and reached became debt-free nine months ahead of the target.
The company which is headed by Mukesh Ambani has raised money from famous global tech investors like Silver Lake, Facebook, KKR, General Atlantic, Vista Equity Partners, Mubadala, L Catterton & Public Investment Fund. Mukesh Ambani managed to raise the money only by selling less than a quarter of Jio Platforms, which is the digital arm of Reliance Group. Facebook committed the biggest capital of Rs. 43,573 crores and is now holding a 9.99% stake in Jio Platforms. Having these investors on board, now the Reliance Industries balance sheet is one of the strongest in the world.
Besides this, the company has also raised Rs. 53,124 crores over the past 58 days through a rights issue. In addition, Reliance Industries also sold 49% shares to Bharat Petroleum. This will result in an Indian JV for fuel and mobility and branded as Jio-BP. Meanwhile, the company even raised Rs. 1.75 lakh crores in the past seven months.
Raising money in the midst of a global lockdown caused by Covid-19 is even more remarkable.
Mukesh Ambani had announced that Reliance Industries will become a zero net debt company by March 2021 in the 42nd Annual General Meeting of Reliance Industries in August 2019. He also highlighted the fact that the company has earlier received strong interest from investors all over the world for its businesses like Reliance Retail and Jio. But at that time, Reliance Industries had a burden of Rs. 1,54,000 crores as net debt on their balance sheet. Investors were a bit apprehensive of this idea when the Saudi Aramco deal delayed. The on-going COVID added more to the fears of the investors.
Reliance Industries entered has entered all the popular sectors in India ranging from grocery to petrochemicals. Some of the famous brands owned by the Reliance Industries are Reliance Trends – the clothing and accessories business, Reliance Retail – e-commerce platform, and JioMeet in the video conferencing segment. In addition to these, the digital services are consolidated under one umbrella organization – the JioPlatform. JioSaavn, JioCinema, JioTV, and Ajio are some of the digital services included on JioPlatform.
But net debt-free doesn’t mean that Reliance Industries will have no debt in their balance sheets. This means that the company is going to have more than enough cash in order to cover the debt sitting on its balance sheet.
