Reliance Industries has announced to issue shares to the existing shareholders on a right basis. Dalal Street experts believe this as a step closer in reducing massive debt pile.
At the end of December quarter, the energy-to-telecom conglomerate had gross debt of Rs 3,06,900 crore and cash and cash equivalents of Rs 1,53,700 crore. Earlier, the company has pledged to be debt-free by March 2021.
The company has pledged to be debt-free by March 2021. It recently decided to sell about 10 per cent in its subsidiary Jio Platforms to Facebook for nearly Rs 43,600 crore to help achieve its goal.
The rights issue reflects the promoter’s unflinching faith in the medium to long-term prospects of various businesses, said Ajay Bodke, CEO-PMS at Prabhudas Lilladher.
Market veterans said the proposed rights issue would help the company’s case in further generating investor interest, including the likes of Saudi Aramco, with which RIL has been pursuing a deal.