Anil Ambani outlines growth blueprint

In a slew of announcements one after another, Anil Ambani on Tuesday outlined investments of nearly Rs 1,25,000 crore (Rs 1,250 billion) and also fund-raising to the tune of over Rs 65,000 crore (Rs 650 billion) for expanding businesses and entering new areas.

Hopping from one AGM to another in a span of a few hours, Ambani told shareholders of Reliance Power, Reliance Capital and Reliance Communications that the investments were not just about creating wealth but sharing it with them.

"We enjoy the trust of over 1 crore shareowners across the Group - the largest such family anywhere in the world," he said invoking the philosophy of his father Late Dhirubhai Ambani that wealth should be shared.

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He added that Reliance Communications may sell 26 per cent stake in the company, and also list its telecom tower subsidiary Reliance Infratel, to become debt free.

"We are considering options to raise equity resources in both RCom and our tower subsidiary, Reliance Infratel. We also have the possibility, if considered appropriate, of combining such a transaction with a possible IPO, for our tower business," Anil Ambani said.

Most of the investments, announced by Ambani, would go into setting up power plants.

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Also, a major part of the funds to be raised would be through the power ventures. A whopping Rs 1,20,000 crore (Rs 1200 billion) would go into creating thermal, hydro and gas-fired power plants.

An estimated Rs 80,000 crore (Rs 800 billion) would be used for creating 20,000 MW of thermal generation capacity by 2015, Rs 30,000 crore (Rs 300 billion) for hydro and Rs 10,000 crore (Rs 100 billion) for gas-based projects.

Besides, Reliance Power would raise Rs 50,000 crore (Rs 500 billion) in what will become the largest fund raising exercise in the corporate history of the country, he said.

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He also said that his group was looking to unlock value in its life insurance venture through listing of Reliance Life as a separate company on the bourses.

"As you know, Reliance Life was the first Indian insurance company to announce its plans for listing in 2009," he told shareholders.

At the same time, Ambani also made clear his intentions to enter new businesses such as banking and the exchange space, besides expanding further his presence in segments like other financial services, power and telecom.

"Our Group is by far the youngest of all large business houses in India, but we already rank among the top 5 on every important financial and operating parameter," Ambani said.

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In banking, he said that the group's ambition was to set up a world-class bank.

Besides, the company would consider raising funds through sale of shares to strategic and financial investors as also through an IPO in telecom tower arm Reliance Infratel.

Incidentally, a deal for raising funds through sale of shares in Reliance Infratel failed, while an unsuccessful attempt was made in the past for the company's IPO.

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He said Rcom has spent nearly Rs 35,000 crore (Rs 350 billion) in capex in the last three years, and its investment this year is projected to be around Rs 3,000 crore (Rs 30 billion) and a similar trend of declining capex cycle expected to continue.

Stock market also reacted positively to the announcements made by Ambani, although gains were modest for the shares of three group companies.

Reliance Capital rose 0.3 per cent to close at Rs 814, RCom gained 0.4 per cent to Rs 170.3, while R-Power rose the maximum by 1.7 per cent to close at Rs 163.25 at the BSE.