“We know there is intention and purpose in the universe,
because there is intention and purpose in us”, said George Bernard Shaw once.
And we know this rings in true for Anil Ambani, Chairperson of Reliance Group
as well. It was just 3-4 months ago that he declared that more than Rs. 35,000
crores worth of loans have been serviced in the past year and he vowed to meet
all the future payment obligations in a timely fashion. And this he has been
quite consistent and religious with.
A large chunk of the debt still remains and he still has a
colossal amount of Rs. 9,390 million rupees of debt that he has to pare. As a
matter of fact, he aims to be debt-free by March 2020. As of now, one of his
subsidiaries, Reliance Power is focusing on the development of the second phase
of the 1,500 megawatt gas-based projects in Bangladesh for which he has signed
a memorandum of understanding (MoU) with the Bangladesh government to develop
3000 MW gas-based projects there. With this development, the company should be
able to clear its Rs. 2,400 crore worth of debt.
Also, looking at the crisis that the NBFC sector is looking
at, which is facing a long-drawn-out liquidity crisis over a year after
IL&FS starting defaulting on repayments, he is hopeful that the current
government will take immediate steps to counter it.
Anil is of the opinion that the only option left to the
NBFCs and HFCs is to raise funds through securitisation. Sharing his insight
onto the matter, he remarks, that these companies have invested years in
reaching out to villages and the smallest of the towns in order to build their
retail franchise. And now the banks are being selective about these quality
portfolios at an exorbitant cost for NBFC and HFCs. However, RBI’s recent draft
guidelines on liquidity management and related matters, according to him is a
welcome long-term measure, yet he feels that the sector needs an immediate
liquidity window. He says that this should be done as in the case of banks, for
NBFCs against their assets.
Accommodating to New
Realities:
For him, adjusting to such grave realities of crisis is not
a problem since the people there are realists. He adds, he learnt after his
father once when he said, “Don’t shut your eyes during the day thinking that
the night has fallen.” He recounted that how Reliance Capital started off with
an asset management company in the year 2006-2007 and now it has redefined the
breadth of the its businesses general insurance, asset reconstruction, securities
and wealth management. He also recalls that this too has been done through
organic growth.
It stands imperative to note that all the businesses of
Reliance Capital are fully capitalised even in conventional capital absorbent
businesses like general and life insurance, while other businesses are capital
light.
The Plans:
Realizing the new paradigm of lesser availability of funding
for entities that are Indian-owned, the group is now in discussion with
strategic overseas players to acquire a majority stake in its some of its
subsidiaries. As a part of its journey, Reliance Capital sold its stake in the AMC
business to its partner, Nippon Life of Japan and realized approximately Rs.
6000 crore. Going forward, both the growth engines of E&C and defence
businesses will remain asset and capital-light without the need for any further
large capital infusion is what his plan is for the times to come ahead.
The company is also at an advanced stage of monetising
several valuable non-core investments, including a stake sale in Prime Focus
and other media assets.
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