Anil D Ambani Reliance Group~Market Cap & Debt ~ Defence to its Defence

Have a Look at the Market Cap (today closing March 28,2016)& Consolidated Debt (September 30,2015) of these Five Listed Companies of Anil D Ambani

Name Of The Company

Market Cap (Rs.Crs)

Total Debt (Rs.Crs)

Reliance Power

13015

31428

Reliance Infrastructure

13747

24645

Reliance Capital

9117

22730

Reliance Communication

12457

35254

Reliance Defence

5098

6884

Total

53434

120941

Rs 120941 crs was the Aggregate Consolidated Long & Short Term Debt of Anil Ambani’s Reliance Five Listed Group Companies as on September 30,2015 while today’s Market Cap is Rs 53434 crs.Aggregate it and you’ll get Enterprise Value without adjusting for any Cash    

Reliance Defence (erstwhile Pipavav) has come into his fold now and a turnaround is expected after CDR was approved ~ RCom is planning to reduce Debt substantially by selling Assets like it’s Tower Business.It also is being supported by Big Brother Mukesh Ambani’s tie ups for Jio Roll outs etc ~ RPower has just declared and paid it’s maiden interim dividend of 10% in December 2015 but continues to struggle to commission Samalkot Power Plant on non availability of Gas ~ Rinfra & RCap are the relatively stabler companies

As long as his companies keeps servicing debt the Banks who have lend will not have to classify the Loans as NPAs….In fact with Anil Ambani planning huge Defence Sector Investments and Growth in his other Companies the aggregate Debt may increase even after Asset Sell offs

Problem is that Anil Ambani has not been enjoying good Investor Credibility after wealth destruction in RCom & RPower & suspected involvement of top management in the 2G Telecom Scam.Investigation continues

The Group’s Market Cap is Rs 53434 crs ~ Compare this with Big Brother Mukesh Ambani’s Reliance Industries that closed today with a Market Cap of Rs 330654 crs

Now his big Focus is on Defence with India having embarked on a Huge Defence  ‘Make in India’ Endeavour opening out FDI  Cap to 49% in the Sector

None of Anil Ambani’s Companies have approached it’s shareholders or the Public for funds after the Reliance Power IPO at Rs 450  in January 2008

None have as None could !

The Reliance Power IPO was a huge obscene premium assault on the Public from which the Public has yet to recover (Quotes at Rs 47 today after a Bonus Issue in 2008 itself  from the Premium collected that adjusted the Price to @ Rs 270!) .The Issue was hyped by the Investment Banker Wolves to create a huge oversubscription.

Of course in January 2011 Anil Ambani had entered into a Consent Plea with SEBI without admission of guilt & was investigated for misuse of Overseas Borrowed Funds and was personally fined and banned access to Capital Markets for a year and Reliance Infra for two years   

As long as Banks are there to support his Companies ,Anil Ambani does not need direct Monies now from Shareholders & the Public ~  Public Monies are routed through the Banks as Debt in any case.Of Course his Group also runs Reliance Mutual Fund which currently has over Rs 150000 crs of Assets Under Management ….interestingly @ three times Group Market Cap ! ….and Oh! SEBI has just warned Mutual Funds not to make it a habit & come to the rescue of Corporates,especially Group Companies for Funds or they will be penalised !…just bark perhaps !  

Now from Telecom & Power woes his focus has shifted to Defence….Defence to his Defence !….time for resurrection perhaps?

Proof of the Pudding lies in the eating and that would mean the Share Price of his Listed Companies need to entertain & sustain new highs in the coming years ~ his Entertainment Business remains unlisted

The Defence Sector is the Flavour & we read of many listed companies announcing plans to enter it  for their piece of a growing pie ~ HFCL for one !

In the 1980’s the flavour was Leasing ~ in the 1990’s the flavour was IT ~ Millenium brought with it the ICE Age that melted quickly

Now it’s Defence & while I remain an eternal optimist ( Yes ! even for the ADA Group resurrection !) I just pray the Public will not be preyed on only to be rendered defenceless by investing in Defence Companies ! ~ Select  Wisely & Well   

This post was a result of Chairman of Reliance ADA Group,Anil Ambani’s column in today’s Edition of Times of India reproduced verbatim below and where I’ve highlighted in bold a few phrases which I have interpreted as push for fine tuning reforms that would benefit his foray into Defence  :

“Mar 28 2016 : The Times of India (Mumbai)
By Invitation – Time to win on Kurukshetra of execution
Anil Ambani

Large-scale policy chang es seldom go unnoticed in a democracy . But the transformation underway in India’s defence policy landscape has slipped quietly under the radar.The new DPP (defence procurement procedure) to be announced at the Def Expo 2016 in Goa, caps a process of far-reaching changes envisioned by Prime Minister Narendra Modi and implemented by defence minister Manohar Parriker. They will energize India’s nascent and vibrant private sector in defence manufacturing.The shortlist of what has been achieved so far is remarkable. The ministry of defence (MoD) has cleared $55 billion worth of projects, giving the biggest push under Make in India and Skill India. Over 55% of items in the prescribed procurement list have been freed from licensing requirements. The removal of anomalies in taxation and exchange-rate variations have created a level-playing field.Besides, the path-breaking concept of strategic partners backed with long-term assurance of contracts will lay the foundation of a strong industrial defence base in the private sector, which will be further strengthened by the enhanced 49% FDI and FPI limit.

The cumulative impact of the proposed changes are far reaching but these reforms need to be taken forward.

We require directed offsets to ensure we get what we need in terms of technology and capabilities. Within the ambit of the `Strategic Partner’ model, the policy should ensure there are no intra or inter-segment restrictions so that large and committed industrial players with capabilities are allowed to undertake more than one major programme on a competitive basis.

The policy should catalyse the development of a sustainable production ecosystem in India. No defence company in the world can survive solely on domestic military orders. We should encourage and incentivize exports, taking full advantage of India’s inherently formidable engineering and IT skills.

The current defence procurement lead time of 6 to 8 years should be cut down to under 3 years. ln line with best global practices, defence procurement specialists and MoD should work together to ensure faster procurements, unambiguous contracts and lower costs. Relaxed FDI norms have started attracting proposals in high technology areas and the test of the policy , efficacy of which will depend on fast approvals, will be in further instilling confidence among OEMs (original equipment manufacturers) to bring critical techno logies to India. Our defence R&D needs to be substantially augmented and a start can be made by instituting a seed corpus of Rs 1,000 crore to support defence research in our top research institutes and private research labs.

We should consider setting up an Aeronautics Commission headed by technical experts, on the lines of the existing commissions for atomic energy and space, to boost cutting-edge research in future technologies. Lastly , the global economic downturn has made many top defence entities available at attractive valuations. The MoD should partner with private industry to jointly invest acquire these high technology assets.

A battle they say is first won in the mind or, more accurately, the mindset. With the new DPP , we have won the battle of the mindset. Now it is time to win in the field -the Kurukshetra of execution.

(Reliance Group now counts defence as one of its focus areas) “

 

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