[blackwasp]

New high, new record: Hammering home his deal making skills, RIL CMD Mukesh Ambani released a statement on Friday morning stating that the company had become net debt free more than 9 months ahead of schedule — which was just the steroid shot the markets needed as both the Sensex and the RIL share price somersaulted, with the latter reaching an all time high of almost Rs 1,789, taking the company’s market value to well beyond the Rs 11 lakh crore mark, making it the first Indian company to achieve that market cap. That’s more than 50% of the ‘stimulus’ package announced by the government in May. Along with the Rs 7,000 crore invested by BP into its fuel retailing business, RIL has raised Rs 1.75 lakh crore — far exceeding its net debt of Rs 1.61 lakh crore. However, according to certain brokerage reports, RIL, which has a gross debt of Rs 3.36 lakh crore — with cash reserves of Rs 1.75 lakh crore — may actually have a debt of between Rs 2.4 lakh to Rs 2.6 lakh crore as it doesn’t include spectrum liabilities of over Rs 20,000 crore while some of its debt was transferred to its subsidiaries.

More incoming: While the investments in Jio Platforms appear to be over, the company is now looking for financial investments in Reliance Jio — its mobile arm — and Reliance Retail. According to Ambani’s prepared statement, they “will induct leading global partners in these businesses in the next few quarters and move towards listing of both these companies within the next five years”. The move into the Rs 11 lakh crore market cap category comes a day after RIL secured an investment of Rs 11,367 crore for a 2.32% stake in Jio Platforms from Saudi Arabia-based Public Investment Fund (PIF) — which is the country’s sovereign wealth fund. With this latest stake sale, Jio Platforms has sold 24.70% of its equity for a total of Rs 115,693.95 crore, in less than 2 months to 10 investors via 11 deals.

The break-up: Apart from the stake sale, RIL also raised Rs 53,124.20 via a rights issue — in fact, combined together, the price of RIL and RIL Partly Paid shares took the company’s market cap to almost Rs 11.50 lakh crore. The fund-raising spree also makes it the world’s largest pre-IPO fund raising in a single round, with $15.2 billion — meaning, at the same valuation — taking it ahead of Ant Financial’s $14 billion fund raising in 2018, though in terms of total fund raising, Ant is ahead with $18.5 billion in two rounds, with the first round in 2016.

[anujmishra]

It is incredible and will be deciding factor for Indian economy in this difficult time. Such investments will keep the sentiments high of overall people and help bounce back economy quickly.

Jio just launched 4 years back in Y2016 and in this 4 years if one counts overall achievements of more than 380Mn customers along with reducing the data prices drastically for everyone. This has helped India to grow digitally and amount of data usage grew in those years is incredible. More and more people are now connected. Lot to come in future.

[ajmat]

Sorry to rain on your parade but Reliance is far from debt free as yet

According to LiveMint

Some Quotes

About three-fourths of the proceeds from the rights issue will be received only in the next financial year. So it may be more appropriate to say that RIL’s reported net debt is on its way to being zero

The investments in Jio Platforms are also yet to be received, but analysts expect the funds to come in this financial year.

A stake sale to BP for the petro-retail joint venture (JV) is also expected to conclude in FY21 and bring in about ₹7,000 crore to the kitty. Since the stated intent of the company was to reduce its reported net debt to zero by end-FY21, more needs to be done to achieve the target.

RIL may not exactly be a debt-free company, but the debt overhang has clearly lifted from over its stock.

[Kosfactor]

Quote - However, according to certain brokerage reports, RIL, which has a gross debt of Rs 3.36 lakh crore — with cash reserves of Rs 1.75 lakh crore — may actually have a debt of between Rs 2.4 lakh to Rs 2.6 lakh crore.

The Indian banking system has around 10 lakh crore debt, this Reliance in itself is a quarter of it, perhaps not newsworthy that one.

[Chetan_Rao]

Actual debt-free or creative accounting 'debt-free'?