InvestorQ : Are there any risks you see in the Reliance Industries as it moves towards becoming zero net-debt by March 2021?
Katherine Gonsalves made post

Are there any risks you see in the Reliance Industries as it moves towards becoming zero net-debt by March 2021?

Answer
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Rutuja Nigam answered.
4 months ago


Reliance has monetized its assets in Jio Platforms by selling a little over 21% at a value of Rs.1 trillion via placement of shares to Facebook and a clutch of PE funds which include Silver Lakes, Vista Equity Partners, General Atlantic Partners, KKR, Abu Dhabi Investment Authority (ADIA) and Mubadala. At the current juncture the company is well poised to become zero debt by March next year. However, there are definitely some medium term headwinds or risk factors for Reliance Industries going ahead. Firstly, the proposed joint deal between Jio and Facebook could run into problems with regulators as well as Competition Commission of India (CCI). The company will be hard pressed to prove that this move will not worsen make the situation in the industry more monopolistic. But the bigger worry for RIL could be a prolonged slowdown in its core lucrative business of oil refining and petchem. This business has been the cash cow powering overall growth of Jio. With weak oil demand, RIL could get hurt by record low levels of gross refining margins (GRM).