Anil Ambani Addresses Media After Reliance Infrastructure Board Meet

The infrastructure sector - it is the largest transaction of a value of rupees eighteen thousand eight hundred crores in the power sector, and three, it was completed in record time from the date of announcement to conclusion in just over eight months, considering the regulatory approvals from CCI, from the MERC, and an approval of reduced from about twenty-two thousand crores to only just seven and a half thousand crores, representing a steep debt reduction of 65% in just a single transaction. Reliance Infrastructure's annual interest cost will also be drastically reduced by nearly 70%, from 2,600 crores to just 800 crores annually. Reliance Infrastructure will emerge as one of the strongest companies in the infrastructure sector with a net worth... year, especially for our over 8 lakh retail shareholders. Above all, Reliance Infrastructure expects to be a zero-debt company next year and will aim to be a top-end credit-rated company. Our debt-equity ratio post today's transaction will fall to just a nominal 0.3:1, the lowest in the industry compared with our peers. With prospects for Reliance Infrastructure becoming debt-free, the company will become debt-free based on two clear visible elements: one, based on arbitration awards already won worth 6,000 crores in cases of the Delhi Metro Rail Corporation, in the case of Goa Power, and in the case of NHAI. We expect the... these regulatory assets will flow back to Reliance Infrastructure and not to our... In addition, we have a further cushion of arbitrations yet to be decided worth another 8,000 crores. So when we total this, we are talking about between 18,000 and 20,000 crores of available avenues to deal with just 7,000 crores worth of debt, and that brings us into thinking and being... itself into a capital-light, high-growth, high-dividend, high-return-on-capital-employed company as its future vision. Reliance Infrastructure after the Adani transaction has a strong portfolio of highly attractive businesses with annuity cash flows. One, our Delhi power distribution business. Our Delhi power distribution business is two and a half times larger than the Mumbai distribution business. Our Delhi distribution business... and is as efficient, if not more, than the Mumbai business. The Delhi distribution business has over 4.2 million customers compared to 2.5 million in Mumbai, and distributes a peak power of over 5,000 megawatts compared to just 1,800 megawatts in Mumbai. The company has dramatically reduced its debt from a peak of 8,000 crores to just 1,500 crores, an 80% reduction. The Delhi... very well for our business in the capital city of New Delhi. Our roads business: Reliance Infrastructure is one of the leading roads businesses in India. It has 11 different projects, including the Delhi-Agra and the Pune-Satara projects. The company has completed its invested investment of 12,000 crores, and it is a high-growth annuity business with a current growth rate of over 13%. Our current revenues are in the region... have a long way to go, from a low of 18 years to a high of nearly 30 years more to go. Urban mass rapid transportation business: Reliance Infrastructure owns the fastest-growing Mumbai Metro business, carrying over 4.5 lakh commuters daily. In the urban mass rapid transport sector, Reliance Mumbai Metro remains a matchless performer with an industry-beating 99.9% punctuality and 100% train availability. Our concession period is for another 25 years more... exponentially with the increase in ridership. Power generation business: As you may be aware, Reliance Infrastructure is the promoter and the controlling shareholder of Reliance Power with a 43% shareholding. With fully operative assets of 6,000 megawatts of power projects, we have an annual revenue of 10,000 crores and a 50% EBITDA margin of 5,000 crores annually. Even today in a situation where the power sector is facing deep stress, Reliance Power... 0.4:1, a unique distinction in the power sector where other companies have a debt-equity ratio as high as 8:1 or even higher. Engineering and construction business: Reliance Infrastructure is one of the leaders in the asset-light engineering and construction business. We have scaled our order book by 9 times in the last three years and have competitively won orders to the tune of 23,000 crores in the last just one year... project in Bangladesh. The new business of defense: Reliance Infrastructure will emerge as one of the strongest players in the defense sector across aerospace, land systems, and naval systems, and has forged multiple partnerships with a number of leading global defense leaders, including joint ventures. This we believe will go a long way to support Prime Minister Modi's Make in India initiative and Skill India... all our stakeholders. Thank you. Questions?

Yeah, I think critically, transformation to being capital-light, all projects being completed, all the capex for the roads is... a better margin in our roads business, 50% builder margin, in our power business, etc. So we believe that the capital intensity phase is over and we are on our way to dramatically improve the rates of return going forward... Okay, so that was not one question, Ashwin. This is typical of you, you know, one question is 11 questions. So let me start the other way round. Let's talk about the defense business. The defense business is a long-gestation business. The minimum cycle times are between 5 and 10 years from the issuance of the acceptance of needs to the RFI to the RFP to bidding to contract negotiation to culmination. But once that exercise is complete, then it's a funnel for 5, 10, 15, 20 years. So don't expect any magic in one year. Our objective is we will be debt-free... the time when we want, but that's an additional avenue for us to put in more equity to strengthen our balance sheet further, because if we want to scale up our EPC book, there are about 250,000 crores worth of E&C opportunities to come in the next 12 to 18 months. And to participate in all of them require substantial amounts of non-fund based limits from the banks and you require a really strong balance sheet for that. So already at 22,000 crores, being debt-free, we already qualify to do any of that. So asset monetization, nothing planned. Equity infusion, both rights as well as... they pan out over a period of time.

Out in the public domain, there is nothing to hide. But we are very, very confident that Mumbai Metro is on a strong footing in the long run. We have 25 years more to go. So this is not a business anywhere in the world which you have to monitor every single day or what has to happen when you have a 35 or 40 year concession. Those who are equally... a corrupt calculation. Reliance Naval Engineering... I'm not going to answer you in Hindi because I know you're looking for Hindi... statement that as per the Companies Act, we are not allowed to be in more than 10 companies, and I have chosen where I want to be, and I'm not going to be decided by Z Business to decide what I should do.

No, I think that the individual prospects for each of the companies is very, very good. We are very optimistic about the future. The bulk of the debt... will continue to create long-term value.

We have a wide portfolio. All of them are dictated by the fact that they will be asset-light, they will be annuity or high-growth businesses, and we will aim for higher ROAs. So our first task was transformation, which means steep debt reduction, which is what we have accomplished today. Our second task is to see that we have a clear roadmap to become debt-free, and that's what will happen next year. And our third trajectory is to really see how each of these businesses will pan out. I think that, as I mentioned to my friend from ET, now your colleague... the defense... assets coming to you. Yes, would it be in phases? As in when it comes, it's a function of approvals from the regulator, and it's always over a period of time. Every utility in India has regulatory assets and they recover over a period of time. So some recover over three years, five years, seven years, whatever. So there's no arrangement that I need to pay that upfront. The deal is very simple: it's 13,000 to 51 on closing, which is done today. To my friend from Z Business, all the dues to the government have been cleared because that was a condition of the closure, and we have got 5,000 crores worth of... and the arbitration notices have been given. We are waiting for the Reliance Naval resolution to take place. This is one aspect. The arbitration is a separate track. As you know, in arbitration, these are all long-drawn processes and nothing happens for many, many years.