Reliance Capital has Rs 1,450 crore exposure to RCom; hopes to recover it by March 2018

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Published: November 16, 2017 1:47:58 PM

As Anil Ambani-led Reliance Communications reels under the immense pressure of debt, the group’s financing arm Reliance Capital said on Thursday that it has about Rs 1,450 crore worth of exposure to RCom.

RCom is reeling under a total debt of about Rs 45,000 crore. (Image: Reuters)

As Anil Ambani-led Reliance Communications reels under the immense pressure of debt, the group’s financing arm Reliance Capital said on Thursday that it has about Rs 1,450 crore worth of exposure to RCom. In an interview to ET Now, Amit Bapna, CFO, Reliance Capital said that Reliance Capital has a total exposure of Rs 1,450 crore out of which Rs 1,000 crore is the loan given to RCom and its subsidiaries and Rs 450 crore is the corporate guarantee which is given on behalf of Reliance Infratel tower asset business and besides that there is no loan given to them.

Yesterday, shares of Reliance Communications fell about 17.24% to hit an all-new record low of Rs 9.6 before settling at Rs 10.3. RCom is reeling under a total debt of about Rs 45,000 crore. Of this, Rs 25,000 crore is domestic debt and remaining Rs 20,000 crore is in the form of foreign loans and bonds.

Amit Bapna said that Reliance Capital is very hopeful of recovering the full amount by March 2018. Amit Bapna said Reliance Capital has a consolidated net worth of about Rs 16,000 crore and has recently posted decent numbers for the July-September quarter, Rs 1,450 crore of exposure to Reliance Communications is insignificant to the net worth. Reliance Capital is hopeful of the IPO (initial public offering) of its general insurance business before March 2018.

Earlier in October 2017, Reliance General Insurance received in-principle approval from the Insurance Regulatory and Development Authority of India (IRDAI) for its IPO. Through the public offering, Reliance Capital plans to dilute about 25% of its holding in the insurer. According to several news reports, the IPO size of Reliance General Insurance is expected to be between Rs 7,000-6,000 crore.  

The share sale comprises a fresh issue of little over 1.67 crore shares by the company and an offer for sale by Reliance Capital of 5.03 crore shares, according to DRHP. Motilal Oswal Investment Advisors, Credit Suisse Securities (India), Edelweiss Financial Services and UBS Securities are the global co-ordinators and book running lead managers to the issue. Haitong Securities and IDBI Capital Markets & Securities are the book running lead managers.

Reliance Nippon Life Asset Management, another group firm recently got listed in last month. This year had emerged as a hit for IPO market as more than Rs 65,000 crore has been raised so far, out of which Rs 43,770 crore notably through five big IPOs of 2017. The list includes SBI Life Insurance, ICICI Lombard General Insurance, HDFC Standard Life Insurance, New India Assurance, General Insurance Corporation.

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