Reliance Infrastructure To Raise Funds From Institutional Investors For Defence Push
Funds raised will be used for opportunities in the defence sector and reducing debt.
Reliance Infrastructure Ltd. will raise up to Rs 2,000 crore via qualified institutional placement (QIP), the company said in a stock exchange filing.
The funds raised from the QIP will be utilised for "capitalising on business opportunities in the defence sector", for reduction of debt and other corporate purposes, the Anil-Ambani led company said in the filing.
Reliance Infrastructure has been betting big on the defence sector, with its chairman Anil Ambani, calling it a “major growth driver of business for the company in the years to come.” The group is eyeing opportunities in aerospace, land and water defence space through its 15 subsidiaries and three joint ventures with foreign equipment manufacturers, he had said in a analyst meet in February.
The company received a fillip when it entered into a joint venture, Dassault Reliance Aerospace Pvt. Ltd, with French-aircraft maker Dassault Aviation SA last year. Through this joint venture, the group will now target business worth Rs 30,000 crore as part of offsets for the 7.8-billion euro Rafale Project, Ambani said.
The group entered the defence sector in 2015, after acquiring controlling stake in Pipavav Defence and Offshore Engineering Ltd. for Rs 2,000 crore, a company that made warships and exploration vessels. It was later renamed Reliance Defence and Engineering Ltd., a listed subsidiary of Reliance Infrastructure.
Reliance Infrastructure’s total long-term debt stood at Rs 22,828 crore according to the company’s second quarter earnings report.