Published 04:32 IST, May 27th 2020
Reliance plans for an overseas listing of Jio Platforms, suggests reports
After raising around $10.3 bn from five investors within a month, Reliance Industries is reported to be thinking of an overseas listing of Jio Platforms.
After raising around $10.3 billion from five investors within a month, Reliance Industries is reported to be thinking of an overseas listing of Jio Platforms. A report by Bloomberg suggests that the proposed IPO can take place within the next two years and the company hasn’t decided on a listing venue. Reportedly, the final decision on timeline and size is yet to be taken.
RIL overseas IPO?
At the AGM last year, RIL Chairman Mukesh Ambani said, "We have received strong interest from strategic and financial investors in our consumer businesses. We will induct leading global partners in these businesses in next few quarters, and move towards listing both these companies in next five years."
Since April, Jio has raised Rs 78,562 crore over five investments from various investors including technology giant Facebook. The latest investment by KKR in Asia, valued Jio at Rs 4.91 lakh crore, is said to be the largest investment by KKR in Asia.
Rights issue
Last week, RIl announced a Rs 53,125 crore rights issue which will be open for shareholders subscription on May 20 and close on June 2. Ambani's firm, on April 30, had announced raising funds of Rs 53,125 crore by way of a 1:15 rights issue - India's biggest and the first such issue by the firm in nearly three decades.
One share will be offered for every 15 shares held at Rs 1,257, a 14 per cent discount to the closing price for April 30. Reliance share price has since risen to Rs 1,458.90 (Friday's closing price) but rights issue price remains the same. The proposed rights issuance will be the first by Reliance in three decades. Typically, cash-strapped companies use rights issues to raise money when they really need it. In these rights offerings, companies grant shareholders the right, but not the obligation, to buy new shares at a discount to the current trading price.
The last time Reliance tapped the public for funds was in 1991 when it had issued convertible debentures. The debentures were subsequently converted into equity shares at Rs 55 apiece. Ambani had in August last year unveiled plans to cut debt to zero by 2021. As part of this plan, RIL has been seeking strategic partnerships across its businesses while targeting to deleverage the balance sheet. At the end of March quarter, RIL had an outstanding debt of Rs 3,36,294 crore. It also had cash in hand of Rs 1,75,259 crore, bringing the net debt position to Rs 1,61,035 crore.
Updated 04:32 IST, May 27th 2020