Reliance Infrastructure Receives Shareholder Approval for Rs 6,000 Crore Fundraising Initiative

Reliance Infrastructure's shareholders have given the green light to a plan for raising Rs 6,000 crore. This will be done through a preferential issue of shares and a qualified institutional placement (QIP). The company disclosed that over 98% of shareholders voted in favour of these resolutions via postal ballot.

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The board of Reliance Infrastructure had approved this fundraising plan on September 19. The plan involves raising Rs 3,014 crore through preferential allotment of shares or convertible warrants. An additional Rs 3,000 crore will be raised via QIP.

Details of the Fundraising Plan

In the initial phase, the company is set to raise Rs 3,014 crore through a preferential placement. This will involve issuing 12.56 crore equity shares or convertible warrants at Rs 240 per share. Promoters of Reliance Infrastructure, through Risee Infinity Private Ltd., will invest Rs 1,104 crore by subscribing to 4.60 crore shares.

Two other investors are participating in this preferential issue. Mumbai-based Fortune Financial & Equities Services and Florintree Innovations LLP are involved. Florintree is owned by Mathew Cyriac, a former Blackstone executive, while Nimish Shah owns Fortune Financial.

Investor Contributions and Impact

Fortune Financial & Equities Services plans to invest Rs 1,058 crore by subscribing to 4.41 crore equity shares through preferential allotment. Meanwhile, Florintree Innovations will contribute Rs 852 crore and receive an allotment of 3.55 crore shares.

This preferential issue is expected to boost Reliance Infrastructure's net worth from Rs 9,000 crore to Rs 12,000 crore. The company aims to maintain nearly zero debt as a result of this financial move.

Utilisation of Funds

The proceeds from the preferential issue will be used for expanding business operations directly or through investments in subsidiaries and joint ventures. Additionally, funds will meet long-term working capital needs and general corporate purposes.

The strategic financial decisions taken by Reliance Infrastructure aim to strengthen its financial position and support future growth initiatives effectively.