Reliance Infrastructure will receive Rs 7,100 crore from the Delhi Metro Rail Corporation (DMRC) after a recent Supreme Court judgement, the company's chairman Anil Ambani told shareholders on Tuesday.
The payment from DMRC will be utilised for debt repayment and the company, which has a standalone debt of Rs 3,808 crore, will become debt free, Ambani said.
Last week, the apex court had ruled in favour of Delhi Airport Metro Express Private Limited (DAMEPL), a Reliance Infrastructure (R-Infra) company which used to operate the Delhi Airport Metro Line, by upholding an arbitral award.
"As a result of SC judgement, Reliance Infra arm DAMEPL will receive a sum of Rs 7,100 crore from DMRC, that will be utilised to repay the debt of Reliance Infra and the company will become debt free," Ambani told shareholders at the firm's annual general meeting (AGM).
The company has an additional Rs 15,000 crore of claims pending before various forums, Ambani said. He added that it has regulatory assets worth Rs 50,000 crore under approval or dispute before various forums for the power distribution business.
In FY21, the company completed 100 per cent stake sale in Delhi Agra Toll Road to Cube Highways and Infrastructure III PTE Ltd for Rs 3,600 crore and sale of entire 74 per cent stake in Parbati Koldam Transmission Company Limited to India Grid Trust for an enterprise value of Rs 900 crore, he said.
It has also completed the sale of a commercial property at suburban Santacruz under a "composite transaction for sale, buyback and lease of the said property" which will result in debt reduction by 35 per cent, he said.
The beleaguered businessman outlined power distribution, new contracts in the engineering, procurement and construction business and defence manufacturing as the new growth engines for the company.
In the last few years, the going has been tough for the Anil Ambani-led Reliance Group, which had to exit the telecom business and face other financial difficulties.
Ambani also informed the R-Infra shareholders that the promoters have infused Rs 550 crore into the company through a preferential issue of shares to increase their holding to 22.06 per cent.
Speaking at the AGM of Reliance Power before the one for R-Infra, Ambani said India's power sector continues to face challenges of low capacity utilisation of thermal plants, above targeted aggregate technical and commercial (AT&C) losses, lower tariffs as compared to the actual cost of supply, and creation of huge regulatory assets.
A "regulatory logjam" is evident from the long pendency of a number of petitions/appeals, which do not reach finality even after 6-7 years of legal proceedings, he said.
Demand for electricity has bounced back to normal levels after being hit by the COVID-19 pandemic, he said, adding that the company was able to generate power despite lockdown-related challenges.
R-Power has an operational portfolio of 6,000 MW and has planned an investment of Rs 3,200 crore to install Flue Gas Desulfurisation (FGD) facilities in its coal-based plants.
He said development of 750-MW Phase-1 of a gas-based power project near Dhaka in Bangladesh is on track and the focus is now on the development of the 1,500-MW Phase-2.
Group company Reliance Infrastructure and other promoters' shareholding in the company has gone up to 24.98 per cent following a Rs 1,325 crore preferential issue, and would increase to 38.24 per cent after conversion of warrants, he added.
RPower reduced debt by Rs 3,100 crore during FY21 and expects to reduce debt by another Rs 3,200 crore in FY22, which will improve the debt to equity ratio to 1.8:1, which will be among the lowest in the sector, Ambani said.