Reliance may break up in 3-4 years with IPOs of Jio, retail business: Bernstein

The Reliance Industries Ltd. logo is displayed atop the company's gas station in Mumbai, India, on Thursday, July 19, 2012. Photographer: Dhiraj Singh/

Reliance Industries may break up in the next three-four years after the initial public offering of its telecom and retail business segments, which should unlock additional shareholder value, said Bernstein Research.

“Following the rights issues and 24.7% sell-down in Jio, RIL is now effectively debt-free. We expect a break-up of the company in the next three-four years through the IPO of Jio and retail business segment which should further unlock shareholder value,” it added.

On 19 June, RIL said it is a net debt-free company, after having raised 1.75 trillion, against its net debt of 1.61 trillion. The company had raised 1.15 trillion through a 24.71% stake sale in Jio Platforms to nearly a dozen investors, and 53,124.20 crore through a rights issue, which was subscribed 1.59 times. It had also sold a stake in the petro-retail JV to BP for 7,000 crore.

Looking at the company’s balance sheet, Bernstein’s analysts said RIL has significantly improved its financial position following these transactions, and its net debt-to-equity will fall significantly from 0.51x in FY20 to 0.06x in FY21, which is the lowest in almost a decade.

Given the $15 billion Aramco deal and free cash flow outlook over the next several years, net debt-to-equity could continue to fall beyond FY21, it said. RIL is in talks with Aramco to sell a 20% stake in its oil-to-chemical business for $15 billion.

This article was first published on livemint.com.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.