The company expects to be debt-free by March 2017. The company’s standalone debt is slightly more than Rs. 16,000 crore with the culmination of transactions such as sale of road and cement assets and investments in defense, he added.
Lalit Jalan, Reliance Infrastructure's Director of Corporate Strategy and Affairs, spoke about his firm's performance during an interview with CNBC-TV18. He spoke about the firm’s strategy toward evolving a transformative agenda.
The director spoke about the recently announced monetization efforts in different areas, including the 49% share ownership in Mumbai power assets, cement, and roads. Mr. Jalan also touched upon the company's increasing presence in the nascent defense sector and its market leadership in the infrastructure space. He also hinted during the interview to CNBC-TV18 that the company seeks to become the country's defense major by venturing further into construction, procurement, and engineering.
Impact of strategy at the debt level
Mr. Jalan stated that the company expects to be debt-free by March 2017. The company’s standalone debt is slightly more than Rs. 16,000 crore with the culmination of transactions such as sale of road and cement assets and investments in defense, he added.
Outlook across different sectors
The cement process was initiated about two months ago and about 15 interested buyers were spotted. The company has shortlisted seven out of the 15 interested buyers and the process of due diligence is in an advanced stage. The transaction will be completed by the end of the current financial year. Mr. Jalan did not quantify the amount that will likely be raised throught the monetization of cement assets, but he did mention to CNBC that it will create significant value for Reliance Infrastructure's shareholders.
The roads business has an attractive portfolio that includes 11 road projects, all of which are revenue operational and connect the major urban corridors. They have also been run on a good valuation basis during the bidding process and the total funds spent on the roads portfolio is slightly above the Rs 9,000 crore mark. Five of the interested parties have already been shortlisted in the selection process and the transaction is expected to close in the current financial year.
The defense sector will be one of the major focal points of the firm's larger strategic framework. It is exploring business opportunities in the nascent defense sector and trying to push the envelope, which has helped the company to get shortlisted for various government projects. The sector is exhibiting a lot of promise and the overall outlook remains positive.
Reliance Infrastructure Ltd is currently trading at Rs. 438.75, up by Rs. 6.55 or 1.52% from its previous closing of Rs. 432.2 on the BSE.
The scrip opened at Rs. 431.5 and has touched a high and low of Rs. 444 and Rs. 427.5 respectively. So far 1435486(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 11366.43 crore.
The BSE group 'A' stock of face value Rs. 10 has touched a 52 week high of Rs. 616.7 on 28-Nov-2014 and a 52 week low of Rs. 282.2 on 25-Aug-2015. Last one week high and low of the scrip stood at Rs. 441 and Rs. 413.1 respectively.
The promoters holding in the company stood at 48.53 % while Institutions and Non-Institutions held 35.6 % and 13.09 % respectively.
The stock is currently trading below its 200 DMA.
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