Anil Ambani can certainly be said to be back with a bang, after his two companies Reliance Power and Reliance Infrastructure turned debt free this week. Ambani's two companies recently cleared a combined debt of around Rs 8000 crores. As the next step, the board of the companies is likely to announce a massive infusion of funds in the companies via strategic sale of shares that may involve preferential allotment to big investors, sources told Businessworld.
Anil Ambani after Adani is the other 'A' in India's index, whose return and rise is likely to take the markets by a storm.
On September 18, shares of Reliance Power Ltd. jumped by 5 percent after the company announced it had fully settled a Rs 3,872 crore guarantee for Vidarbha Industries Power (VIPL). This settlement resulted in the release of all corporate guarantees, undertakings, and obligations related to the outstanding debt of Rs 3,872.04 crore. In an official statement, Ramandeep Kaur, the Company Secretary and Compliance Officer, for Reliance Power confirmed: “The entire obligations of the Company as a Guarantor on behalf of VIPL have been fully settled, resulting in the release and discharge of Corporate Guarantee, Undertakings, and all related claims concerning VIPL’s outstanding debt.”
As on Wednesday's closing price of Rs 32.97, the market-cap of Reliance Power stood at Rs 13,247 crores. As of FY24, Reliance Power has developed a portfolio of power projects and coal mines where approximately 5,945 megawatts of power projects have been commissioned, with the remaining projects at various stages of development. Additionally, Reliance Power confirmed that it had resolved all disputes with CFM Asset Reconstruction.
VIPL, in which a 100% stake had been pledged to CFM, ceased to be a subsidiary of Reliance Power. This ended all of Reliance Power’s obligations as VIPL’s guarantor, as the corporate guarantee was officially released.
The transaction, completed on September 17, 2024, saw Axis Trustee Services invoke a pledge on VIPL’s shares on behalf of CFM Asset Reconstruction and Axis Bank, the primary lenders to VIPL. With this, Reliance Power announced that it is now free of debt owed to banks or financial institutions. The company further clarified that this was not a related-party transaction, as the lenders are not part of Reliance Power’s promoter group, nor was it part of a broader scheme affecting the company’s assets. The company’s consolidated net worth at the end of the first quarter of FY25 stood at Rs 11,155 crore. Furthermore, Reliance Power, along with Rosa Power Supply and VIPL, agreed to drop all legal actions against CFM, with CFM similarly withdrawing its cases against Reliance Power and Rosa Power, including those filed under the Insolvency and Bankruptcy Code.
Ambani's another company, Reliance Infrastructure informed the exchanges on Wednesday that it has cleared around 90 per cent of its debt and the company's net worth stood at Rs 9041 crore. In comparison, the market cap of the company stood at around Rs 8500 crore going by Wednesday's closing price of Rs 282.73
Reliance Infra said that Invent Assets Securitisation and Reconstruction Private Limited, a lender to the Company, has novated certain charged securities to recover its dues. As a result, Invent ARC's entire fund-based outstanding amount has been reduced to Zero. The company said its standalone external debt is down to just Rs 475 crores from earlier Rs 3,831 crores. Additionally, Reliance Infra has cleared its funded outstanding dues to Life Insurance Corporation of India, Edelweiss Asset Reconstruction Company Limited, ICICI Bank, Union Bank, and other lenders. The company’s external debt liability is down to Rs 475 crore. Consequently, the net worth of the company will stand at Rs 9,041 crore, Reliance Infra announced. As of FY24, Reliance Infrastructure’s Engineering and Construction (E&C) Division has an order book valued at Rs.1,974.64 crore (USD 237 million) with major projects in the pipeline. Reliance Infrastructure owns a 23.15 percent stake in Reliance Power as of June 30.
Financial Performance
As per, Reliance Power’s latest financial update, revenue increased by 4 percent to Rs.1,992 crore, while the net loss decreased to Rs.98 crore compared to the same quarter last year.
For Q1 FY25, Reliance Infrastructure Ltd reported a 30 percent revenue rise to Rs.7,193 crore. The company’s net loss was Rs.93 crore, reduced from the same quarter a year ago.
