In the past two weeks, both companies have announced raising Rs 4,500 crore through preferential issues of equity shares and Rs 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 Rs 6,000 crore will be raised through qualified institutional placement (QIP), with Reliance Power and Reliance Infrastructure each aiming for Rs 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 Rs 17,000 crore in equity or equity-linked bonds will provide the group companies with a total investment outlay of Rs 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 Rs 25,000 crore. According to stock exchange disclosures, both companies are raising Rs 4,500 crore through preferential issues of equity shares. Of this, Rs 1,750 crore will be invested by the promoters, while the remaining Rs 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 Rs 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.
