The Anil Ambani led Reliance Group is amidst a crisis as it rests on minimal capital with its 2G services, spectrum, real estate, telecom towers, power distribution and DTH. It’s total market value has come down to a figure of a mere ₹50,000 crores, compared to its aggregate high value of ₹ 4 lakh crores. However, Anil Ambani is not among the ones who will give up anytime soon. In a recent development, he has tied up with a bunch of global defence majors for setting it’s production in India. The project has initiated the construction of a manufacturing facility of Dassault Reliance Aerospace (DRAL) in Nagpur.
RAPID CHANGES IN THE RELIANCE GROUP
These recent developments have brought in huge changes in the company. The biggest among them is that the flagship telecom business, Reliance Communications (RCom), will lessen in scope. The company has come up with an offer of 51% stake to the lenders in exchange for the debt. It will repay around ₹27,000 crore debt; raising ₹17,000 crore through monetisation of spectrum, towers, fibre network and media convergence nodes. Another sum of ₹ 10,000 crore will be through the sale of real estate assets across eight major cities of India. After the successful installment of this, the debt amount will come down to a figure of ₹6,000 crores from ₹44,000 crores.
PROS OF INVESTING IN THE RELIANCE GROUP
1. Reliance Group is recapitalising its market value as well as status. Since the debt of the company is shrinking with time, it will be an ideal candidate to compete in the stock and money markets.
2. The recent government decision to reduce custom duties in the telecom and DTH sector, including others will prove to be decisive for the Reliance Group as it’s expenses in tax duties will cease down.
3. Reliance Group has able to clinch a positive share price. Within the Anil Ambani group, the top share gainers were RELIANCE INFRA (up 8.8%) and RELIANCE CAPITAL (up 4.9%). It is hence widening the gap for investors with a decent return.
