Mon Oct 07 11:53:10 UTC 2024: ## Anil Ambani’s Reliance Group Back in Fund-Raising Mode
New Delhi: Reliance Group, helmed by Anil Ambani, is once again seeking funds, targeting investors, banks, and financial institutions. Two listed companies within the group, Reliance Infrastructure Ltd and Reliance Power Ltd, are aiming to raise a total of ₹17,600 crore.
In the last two weeks, the companies have already raised ₹4,500 crore through equity share and preference share issuance and another ₹7,100 crore through the issuance of equity-linked foreign currency convertible bonds (FCCBs) to international investment firm Varde Partners. Now, they are preparing to raise an additional ₹6,000 crore through a qualified institutional placement (QIP).
The group is looking to invest ₹50,000 crore over the next few years to revitalize the two companies. After a bitter dispute with brother Mukesh Ambani following their father Dhirubhai Ambani’s death, Anil Ambani’s businesses faced financial difficulties. Most of the group’s listed companies were eventually taken over, leaving Reliance Infra and Reliance Power as the only remaining entities under Anil Ambani’s control.
The companies have managed to reduce their debt burden through debt restructuring and recovery of old receivables. With a clean slate, the group is optimistic about the future.
While the boards of directors of both Reliance Infra and Reliance Power have approved the fundraising proposals, obtaining shareholder approval is the next step. This is expected to happen by the end of this month, given the companies’ reduced debt load.
However, despite the clean slate, domestic investors remain wary and have been reluctant to invest in the companies. Foreign private equity firms are the primary source of interest for the equity stake.
The Securities and Exchange Board of India (SEBI) has barred Anil Ambani from raising funds from the capital markets. Consequently, his son, Jai Anmol Ambani, has assumed leadership roles in the two companies. He has begun to stabilize operations and is now focusing on fundraising efforts.
Only time will tell whether Jai Anmol Ambani can navigate his father’s past financial missteps and successfully steer the businesses to a brighter future.
First Piper 