Reliance Group’s ₹17,600 crore fundraising strategy set to offer capital for their expansion plans

New Delhi, Oct 6 (PTI) Equipped with ₹17,600 crore fundraising and a zero-debt status, Anil Ambani's Reliance Group companies - Reliance Infrastructure Ltd and Reliance Power Ltd - are poised to execute their growth strategies, according to officials.

In the past two weeks, both companies have announced raising ₹4,500 crore through preferential issues of equity shares and ₹7,100 crore from renowned global investment fund Varde Partners through equity-linked long-term FCCBs, having a long maturity period of 10 years and low interest rate of 5 per cent.

An additional ₹6,000 crore will be raised through qualified institutional placement (QIP), with Reliance Power and Reliance Infrastructure each aiming for ₹3,000 crore.

With resolutions in place, shareholder approvals are expected by the end of the month, officials said.

A senior official of the group stated that Reliance Group's strategy of raising capital through equity or equity-linked long-term bonds will offer the group companies essential growth capital for their expansion plans.

Even with a conservative debt-to-equity ratio of 70:30, raising over ₹17,000 crore in equity or equity-linked bonds will provide the group companies with a total investment outlay of ₹50,000 crore for their future business plans over the next few years.

The fundraising will also boost the net worth of both companies to around ₹25,000 crore.

According to stock exchange disclosures, both companies are raising ₹4,500 crore through preferential issues of equity shares. Of this, ₹1,750 crore will be invested by the promoters, while the remaining ₹3,750 crore is being contributed by four major investors -- Fortune Financial & Equities Services, Florintree Innovations LLP, Authum Investment and Infrastructure, and Sanatan Financial Advisory.

In addition, Varde Partners is investing ₹7,100 crore, through equity-linked foreign currency convertible bonds (FCCB). These equity-linked FCCBs have a long maturity period of 10 years and a low interest rate of 5 per cent.

These fundraising plans indicate that the financial growth engines in both companies are in place, the officials added.