Reliance Industrial Investments Holdings Ltd (RIIHL) is planning to raise ₹4,000 crore to meet the group’s funding and investment requirements, two people aware of the development said, requesting anonymity.
“The funds will be raised across tranches through optionally convertible preference shares at a dividend rate of 6%," said one of the people cited above.
RIIHL’s parent Reliance Industries Ltd (RIL) did not respond to an email query sent on Wednesday.
RIIHL, the vehicle to invest in various subsidiaries of RIL, gives loans and buys stakes in various ventures to strengthen the offerings of its subsidiary companies.
Till the second quarter of this fiscal year, RIIHL had raised ₹8,000 crore through 778 million optionally convertible preference shares.
“The objective of the issue is general corporate purpose and to fund various investments proposed to be made by the company," said the second person mentioned above.
In the third quarter, RIIHL had acquired an 88% stake in Kanoda Energy Systems Pvt. Ltd (KESL) for ₹75 crore. KESL is a renewable energy services company with presence in specialized fields of solar advisory, product design and technology validation, along with engineering, procurement and construction, and operation and maintenance of solar photovoltaic (PV) systems.
RIIHL also invested ₹1.03 crore in New Emerging World of Journalism Pvt. Ltd (NEWJ), a startup that curates and produces video content for smartphone users. The company also incorporated a wholly-owned subsidiary company, Jio Estonia OU, in Estonia to engage in software development and consultancy for existing and future technology initiatives.
Over the last year, RIL and its subsidiaries have been acquiring stakes in various ventures, including The Indian Film Combine, Eros International, Saavn, Embibe, KareXpert Technologies and US-based Radisys Corporation.
So far, RIIHL has backed 40 subsidiaries, which include Indiawin Sports Pvt. Ltd, Naroda Power Pvt. Ltd, Reliance Jio Media Pvt. Ltd and Reliance Payment Solutions Ltd, among others.
RIL’s debt, which rose to ₹2.74 trillion at the end of the December quarter, up from ₹2.19 trillion as on 31 March, 2018, has been a key concern for analysts. But with RIL now planning to monetize its tower and fiber businesses, the concerns would ease.
“We are going to demerge our tower and fibre business. It means that eventually, you are going to see a lot more of the reverse cash flow and strengthening of the balance sheet. The intensity of capital expenditure will also come down," V. Srikanth, RIL’s joint chief financial officer, had said on 17 January.