Anil Ambani, who had to be saved from going to jail over unpaid dues to a vendor by sibling Mukesh Ambani, seems to have borrowed from the elder sibling's playbook of reducing the debt burden and creating leaner entities. Anil Ambani Group firm Reliance Infrastructure (RInfra) is on track to reduce its debt burden of Rs 6,000 crore, media reports say.
The firm wants to be an asset- and capital-light entity, a report on the Business Standard website said. The group's defence businesses will also follow the lean entity model, group chairman Anil Ambani told the annual general meeting. "Our intent is to reduce the debt further. At present we have around Rs 6,000 crore of debt but with a large net-worth," the RInfra chairman said, adding the company will focus on the domestic market and take up more complex infrastructure and transportation projects, the report said.
"We hope to become one of the top five defence companies among the private players in the country, serving the needs of self-reliance and technological advancement and becoming a global supplier. Our defence business in partnership with global leaders will ensure optimum utilization," he said. Anil Ambani also claimed that the group's four business verticals in the sectors of roads, metro, energy, and airports are fully funded.
The group sees India's Rs 3-lakh-crore defence budget as a great opportunity for domestic players. "Of the Rs 3 lakh crore budget, Rs 1 lakh crore is for purchase of new weapons platforms and military hardware. This is a great opportunity for us to participate," he said. The company's joint ventures with French firms Dassault Aviation and Thales provide it with a presence in the defence sector.
"Both these joint ventures are operational and the factories are located in Mihan in Nagpur. Both are exporting high technology and high-value products to global markets in both civil as well as defence and aerospace areas," Anil Ambani claimed.
Anil Ambani is bullish on the infrastructure space with an outlay of Rs 100 lakh crore over the next five years, which he termed with very vast needs. RInfra is trying to participate in a large number of infrastructure projects that the government is planning to launch in the next five years. The government Prime Minister Narendra Modi has unveiled a massive infrastructure program to make that is expected to fuel economic growth for his $5-trillion economy push. In the defence sector, Prime Minister Modi's push for 'Make in India' is expected to open up the sector to the private sector where 49 percent foreign direct investment (FDI) is now allowed.
The company has bagged a few large orders including the Rs 7,000 crore Versova-Bandra Sealink project and a few metro projects in the megapolis. The company is yet to receive cash out of the Rs 5,000-crore Delhi Metro arbitration award that it won five years ago. Anil Ambani hopes to conclude the sale of the Delhi-Agra toll road that could fetch RInfra Rs3,600 crore.
The Anil Ambani Group has made a dramatic turnaround from a few months back when its chairman almost found himself in jail over a contempt of court order after defunct Reliance Communications failed to pay telecom equipment vendor Ericsson about Rs 500 crore after a proposal to sell spectrum to brother Mukesh Ambani's Reliance Jio fell through. Mukesh Ambani's Reliance Industries stepped in and bailed out Anil Ambani by clearing the debt.
Mukesh Ambani has been in a major push to reduce debt for his group companies and recently signed a deal to sell a stake to Saudi Aramco in the oil refining business.