Reliance Infrastructure (Image Source: rinfra.com)
New Delhi: Anil Ambani-led Reliance Infrastructure Limited has announced plans to raise Rs 6,014 crore through a mix of share sales and convertible warrants. This announcement came a day after the company settled its long-standing disputes with the Adani Group over power distribution and with CFM Asset Reconstruction over a loan issue.
What Reliance Infrastructure Said?
In a statement released late Thursday, following a board meeting, the company said it would raise Rs 3,014 crore by issuing 125.6 million equity shares or convertible warrants at Rs 240 per share. This will be done through a preferential issue. It allows the company to sell shares directly to selected investors rather than through the open market.
What Will Happen In Preferential Issues?
As part of the preferential issue, shares will be allocated to the promoter group company, which are Risee Infinity Private Limited, and other investors such as Florintree Innovation LLP and Fortune Financial & Equities Services Private Limited. This move will increase the promoter’s stake in Reliance Infrastructure and boost the company’s net worth from Rs 9,000 crore to over Rs 12,000 crore.
On Wednesday, after settling its disputes, Reliance Infrastructure announced it had become debt-free, and its stock responded positively, closing at Rs 284.75 per share on the BSE.
Another Fundraise
In addition to the preferential issue, the company also plans to raise another Rs 3,000 crore through a qualified institutional placement (QIP). This is a method where shares are issued to institutional investors, and the company will seek approval from shareholders for this soon.
Purpose Of Fund Raise
The funds from the share sales will be used to expand the company’s business operations directly or through its subsidiaries and joint ventures. The money will also help meet long-term working capital needs.
About Reliance Infrastructure
Reliance Infrastructure is involved in several sectors, including power distribution in Delhi, engineering, procurement, and construction (EPC) services, as well as projects in defense, metro services, toll roads, and airports.