Reliance Infra raises Rs 1,910 crore; promoters to invest Rs 1,100 crore
Reliance Infrastructure
The flagship firm of Anil Ambani, Reliance Infrastructure Ltd is hoping to raise Rs 1,100 crore of equity infusion from the promoters and another Rs 1,910 crore from two Mumbai-based investment firms. As reported in a company filing, the sum is as per the agreement reached between the investment firms and Reliance.
The board of the company on September 19 approved a fundraise plan of Rs 6,000 crore, out of which it would raise Rs 3,014 crore through preferential allotment of shares and Rs 3,000 crore share issue to institutional buyers as detailed in a report by Press Trust of India.
Brief history of Reliance Infrastructure
Reliance Infrastructure Limited, a constituent of the Reliance Group was incorporated in 1929. The Company is engaged in the business of providing Engineering and Construction (E&C) services for power, roads, metro rail, and other infrastructure sectors. The Company is also engaged in the implementation, operation, and maintenance of several projects in the defense sector and infrastructural areas through its special-purpose vehicles. It has executed the state-of-the-art Mumbai Metro Line One project on a build, own, operate, and transfer basis as per its official website.
Further, the first phase will result in a preferential placement worth Rs 3,014 crore in terms of which 12.56 crore equity shares or convertible warrants will be issued at an issue price of Rs 240 per share, as stated in the postal ballot by the company wherein it sought nod from shareholders for issue of shares.
Of this, promoters of Reliance Infrastructure will invest Rs 1,104 crore by subscribing through promoter company Risee Infinity Private Limited. Risee will subscribe for 4.60 crore shares. The two other investors participating in the preferential issue are Mumbai-based Fortune Financial & Equities Services and Florintree Innovations LLP. Florintree is owned by former Blackstone executive Mathew Cyriac, while Fortune Financial is owned by Nimish Shah.
Reliance Infra promoters hold 21.34 per cent share. Fortune Financial & Equities Services are expected to invest Rs 1,058 crore through subscription for 4.41 equity shares through the preferential allotment route. Florintree Innovations will invest Rs 852 crore. Shares of 3.55 crore will be allotted.
The preferential issues will increase the net worth of Reliance Infra from Rs 9,000 crore to Rs 12,000 crore, with near zero debt. The company is looking for shareholders' nod by postal ballot. The e-voting will begin on 20 September and will close on 19 October.
The result of the postal ballot will be declared on October 21. The Preferential Issue proceeds will be utilized for the expansion of business operations directly and/or by way of investment in subsidiaries and joint ventures, including meeting the long-term working capital requirements and for general corporate purposes.
