Reliance Industries owned Jio Infocomm reported a jump of 177% in its profit in Jan-March 2020 quarter as compared to the last year same period. However, Reliance Industries on the whole witnessed a 37% dip in profit – highest ever. RIL has been in the lime light with some blockbuster deals in recent, and it seems many are yet to come. Is the ‘Zero Debt’ finish line ahead of the timeline?
Crux of the Matter
Rely on Reliance? Mukesh Ambani’s Reliance Jio Infocomm announced a profit of ₹2,331 crores for the Jan-March 2020 quarter. There is a year on year increase of 177% in the profit of Jio. However, Reliance Industries’ overall net profit in Jan-Mar 2020 quarter stood at ₹6,546. This is a 37% (y-o-y) fall in profit – highest ever fall in profits witnessed by RIL. Reliance also announced a Rights Issue. Rights Issue share ratio is 1:15, meaning you can buy 1 share for 15 shares of RIL you hold. Each share in the issue is priced at ₹1,257. With the Rights Issue, RIL will raise ₹53,125 crores. This is the first time in 30 years RIL is raising funds from the public.
In Other Things… While the Coronavirus pandemic has hit the world very hard, Reliance Chairman Mukesh Ambani has decided to take a 100% salary cut. Top executives of RIL will take a 30-50% salary cut. Whereas, RIL employees with a salary of more than ₹15 lakhs will take a 10% salary cut. Annual cash bonuses and performance-linked incentives have also been deferred.
Will the ‘Zero Debt’ Plan Be Achieved Early? Mukesh Ambani announced to make Reliance debt free in the last Annual General Meeting. At that time, RIL had ~ ₹1.5 lakh crores debt. Since then, RIL in 2019 partnered with Microsoft for its Jio employees. Recently, Facebook invested $5.7 bn in Jio. RIL is in talks with Saudi Aramco to sell around a 20% stake. Brookfield Asset Management is also likely to invest in RIL’s telecom towers.
With all these deals and many on their way, will RIL be debt-free before March 2021 as pledged by Mukesh Ambani?
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Reliance’s Petroleum Refinery at Jamnagar, Gujarat is the world’s largest. It has a capacity of refining 1.24 million barrels per day. It was established by Mukesh Ambani in 2000.
Mukesh Ambani is fond of cars. He has over 160 cars including Rolls Royce Phantom, Mercedes-Maybach Benz S660 Guard, Bentley Continental Flying Spur, Aston Martin Rapide, and the completely bulletproof BMW 760Li.
India is the second-largest oil refiner in Asia with a capacity of 249.45 million tonnes only behind China.
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