RIL’s recent fundraise has no precedence in Indian corporate history: Mukesh Ambani2 min read . Updated: 23 Jun 2020, 09:38 PM IST
Mukesh Ambani said that RIL's consumer businesses--Reliance Retail and Jio-- have collectively grown by 49.3% year-on-year of the consolidated earnings before interest tax depreciation and amortisation
Reliance Industries Chairman Mukesh Ambani has termed the recent spate of fundraises by group an unprecedented chapter in Indian corporate history, a feat which he said had become far more remarkable given the growing uncertainties that prevail due to due to outbreak of covid19, which has halted and slowed investments and business activity across the world. “ We have recently raised over ₹1,68,818 crore through investments by global tech investors into Jio Platforms of ₹1,15,694 crore and the Rights Issue of ₹53,124 crore, Ambani told shareholders in the company’s annual report released on Tuesday. “ The combined capital raised has no precedence globally in such a short time. Both of these are also unprecedented in Indian corporate history and have set new benchmarks. This is even more remarkable that this was achieved amidst a global lockdown caused by the COVID-19 pandemic" he said.
Ambani, who had at RIL's annual general meeting last August announced plans to sell 20% stake in its refining and petrochemicals business for $15 billion to Saudi Aramco to become a net debt free company, maintained that the transaction remains on track despite some headwinds.“The partnership gives our refineries access to a wide portfolio of value-accretive crude grades and enhanced feedstock security for a higher oil-to-chemicals conversion," Ambani said. The yet to close deal was part of RIL initial plans to deleverage, however speculation has been rife on the possibility of talks being called off due to global glut in oil prices due poor demand environment because of pandemic.
Ambani added that RIL's consumer businesses--Reliance Retail and Jio-- have collectively grown by 49.3% year-on-year of the consolidated earnings before interest tax depreciation and amortisation (Ebitda). The company's consolidated Ebitda crossed the ₹1,00,000 crore mark, a first by an Indian company. RIL's consumer businesses now account for 35% of its consolidated segment Ebitda. RIL's retail business achieved a turnover of ₹1,62,936 crore and a store count of 11,784 during the year. "Reliance Retail continues to grow in scale, driven by new store expansions across the geography, improving store throughput and favourable product mix. Operating leverage is resulting in the release of strong operating cash flows to continue making requisite investments to secure future readiness and delivering profitable growth," said Ambani.
RIL's roll-out of the digital commerce initiative will open up further growth opportunities for the organised retail business, Ambani said adding that Reliance Retail and WhatsApp have entered into a commercial partnership agreement to further accelerate Reliance Retail’s Digital Commerce business on the JioMart platform using WhatsApp and to support small businesses on WhatsApp. "Reliance Retail has the largest customer franchise for over 125 million registered customers who cherish all its unique store concepts. Every week, Reliance Retail serves millions of customers who patronise our stores," he said.
Ambani added that RIL's diversified earnings streams and conservative balance sheet place the company at an advantageous position to face the ongoing macro challenges and it is committed to its investment plans in its consumer businesses and new initiatives. "We are at the doorsteps of a huge opportunity and our Rights Issue and all other equity transactions will strengthen Reliance and position us to create substantial value for all our stakeholders in the years to come," Ambani said.