Categories: Business

RIL on track to achive zero net debt says a report

Photo: FILE

Mukesh Ambani

new Delhi. Reliance Industries is on its way to becoming a debt-free company. During the last few weeks, Reliance has raised significant funds from various companies, which has made it easier for them to achieve the goal of becoming a zero debt company. A brokerage company report states that even if Reliance's deal with Saudi Aramco is delayed, it will still be in a position to pay off its entire net debt. Reliance Industries, controlled by billionaire industrialist Mukesh Ambani, raised a total of Rs 78,562 crore by selling a small stake in its digital unit to Facebook and private equity companies such as Silver Lake, Vista Equity, KKR and General Atlantic. Apart from this, the company is also raising Rs 53,125 crore through rights issue.

A research report on Edelweiss on the company states, "After the recent deals, we have studied the balance sheet of Reliance Industries. The company has raised Rs 1.3 lakh crore as equity during the last month. Our contention is that even if the Aramco deal is delayed, the company will be able to pay its entire debt of Rs 1.6 lakh crore in 2020-21. The report said that the company's adjusted net debt of Rs 2.57 lakh crore is somewhat higher and will take longer to repay. Edelweiss has said that the company's telecom unit Jio's capital expenditure has been largely met. Thus, Reliance Industries will be able to achieve a free cash flow (FCF) of Rs 20,000 crore in 2020-21, despite lower income from the oil and gas sector.

The brokerage company said, "We estimate that Reliance Industries will sell a 20 percent stake in Jio. Apart from this, the company will have cash of Rs 1.3 lakh crore after selling the 49 per cent stake in the retail business of fuel to BP for Rs 7,000 crore. In such a situation, the company will be able to achieve the target of debt-free in 2020-21.

This post was published on May 31, 2020 2:12 pm

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