Lawstreet Journal

Reliance Industries resolves to become ‘zero-debt’; considers a rights issues to meet target

Lawstreet Journal 1 May 2020 2:39am

Image courtesy: Lawstreet Journal Business Reliance Industries resolves to become ‘zero-debt’; considers a rights issues to meet target

Reliance Industries Limited (RIL) recently expressed its resolve to become a net-zero-debt company on 30th April, in its board meeting. The Mukesh Ambani led conglomerate said that that it will consider a rights issue of equity shares to achieve the said goal.                                            

Reliance Industries is India’s highest valued listed firm with a market capitalization of Rs 9.25 lakh crore. It has a gross debt of over Rs 3 lakh crore, and net debt of over Rs 1.5 lakh crore, making it one of the most indebted companies in the country. Mukesh Ambani led RIL is also one of the most cash-rich companies with over Rs 1.3 lakh crore cash in hand. The aim to make it a 'zero net debt' firm was also expressed by the chairman back in August 2019.

On 27 April 2020, RIL issued a notice to Stock Exchanges with its proposal to issue equity shares to existing shareholders on Rights basis, subject to law and regulation by RIL. Though no detail was shared regarding the size of the issue or its proposed equity dilution or date, considering RIL’s current market cap (of Rs 9.25 lakh crore) and its large retail shareholder, one can expect the offering to help the company cut its debts.

Analysts believe that the move reflects the promoter’s constant faith in the medium to long term prospects of various businesses. Commenting on it -… Continue Reading...

Tagged: Reliance Industries   Reliance Industries Limited  
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