Mukesh Ambani’s promise fulfilled: RIL becomes net debt free thanks to Jio stake sale, rights issue

The company owed Rs 161,035 crore, as on 31st March 2020.

Mukesh Ambani’s RIL has become net debt free after the company raised money by multiple stake sales of its telecom arms Jio and Reliance Industries Ltd.’s rights issue, much before the March 2021 deadline of becoming net debt free. “Today I am both delighted and humbled to announce that we have fulfilled our promise to the shareholders by making Reliance net debt-free much before our original schedule of 31st March 2021,” RIL chairman Mukesh Ambani said in a statement on Friday. The company owed Rs 161,035 crore, as on 31st March 2020 and Jio alone raised Rs 115,693.95 crore in 58 days with companies such as Facebook investing in it. The US-based social media platform has got the biggest slice of Reliance Jio’s pie at 9.99% equity stake and with investment of over Rs 43,500 crore. 

Reliance Jio has been on a roll lately with many global companies announcing investments in India’s biggest telecom company by subscribers. Other than Mark Zuckerberg-founded Facebook, Silver Lake Partners, Vista Equity Partners, General Atlantic, KKR, Mubadala, Abu Dhabi Investment Authority, TPG, PIF, L Catterton also announced investments in Jio. “The combined capital raised has no precedence globally in such a short time. Both of these are also unprecedented in Indian corporate history and have set new benchmarks,” RIL said. Not only did the stake sale helped company become net debt free, it will also provide RIL with foreign capital and strategic partnerships as it looks to become an end-to-end digital services provider in sectors such as telecom, data, content, entertainment, e-commerce, education, and more.

RIL’s rights issue was subscribed 1.59 times and also played key role in making RIL net debt free. It rights issue was not only the largest ever in India, but also the largest in the world by a non-financial entity in the last ten years, the company said in a statement. In August 2019, RIL chairman Mukesh Ambani had said that the company has a roadmap to become a net-debt free company before 31 March, 2021.

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