Reliance Retail to connect kirana stores digitally soon
August 12, 2019
Full text: Mukesh Ambani speech to RIL’s 42nd AGM
August 12, 2019

Reliance Industries Chairman Mukesh Ambani on Monday tried to assuage investor concerns over the group's rising debt levels, saying the group has a clear roadmap to become zero net-debt company in 18 months.
The group ended last financial year with a net debt of Rs 1,54,478 crore.
Addressing the group's 42nd AGM in Mumbai, Ambani said he was confident of growing the company's consolidated EBIDTA 15 per cent annually over the next five years. He said the group's telecom vertical Reliance Jio and retail venture Reliance Retail would account for 50 per cent of the company's EBITDA soon.
He promised that the company would reward shareholders abundantly with periodic bonus issues and higher dividends and other means once it becomes debt-free. Shares of the company are up 20 per cent since the last AGM in July 2018, but have underperformer Nifty by 11 per cent over the past three months. The stock is down 9 per cent in last one month.
The company accumulated gross debt of more than Rs 2.87 lakh crore, as it feverishly diversified into consumer-focused businesses in retail, telecom and e-commerce over the past few years besides majorly upgrading the core refining and petrochemicals businesses.
In the last financial year, the company’s finance cost more than doubled to Rs 16,495 crore from Rs 8,052 crore in the previous year. The group attributed the increase primarily to the commencement of digital services business, petrochemical projects at Jamnagar and higher loan balances.
Global brokerage Credit Suisse earlier this month downgraded RIL’s stock to 'underperform' from 'neutral' rating and slashed its target price, saying the group has been free cash flow negative for six years now and has been facing margin pressures in refining and petrochemicals. The group is likely to be free cash flow negative for FY20-21 as well, Credit Suisse said in its August 5 report.
RIL’s total liabilities hit $65 billion in FY19 from $19 billion in FY15, accounting for 40% of enterprise value. Total interest cost rose $4 billion in FY19 from $1.2 billion in FY15
Ambani told the AGM that RIL has transferred its telecom infrastructure assets into two separate infrastructure trusts for a consideration of Rs 1.25 lakh crore with the intention of raising money from large global institutional investors. “We have received strong interest and commitments from reputed global investors and are confident that these transactions will be completed by the end of this financial year. Post this, we ended last year with net debt of Rs 1,54,478 crore,” he said.

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