For Rs 5,230 cr, Mukesh Ambani led Reliance Industries to buy Den Networks, Hathway Cable

It is official! Mukesh Ambani led Reliance Industries (RIL) on Wednesday revealed what has already hit headlines - that it will buy a majority stake in both Den Networks and Hathway Cable and Datacom. RIL will be spending as much as Rs 5,230 crore on these transactions.

In a statement today, while outing its second quarter results, RIL revealed that it will make a "primary investment of Rs 2,045 crore through a preferential issue under SEBI regulations and secondary purchase of Rs 245 crore from the existing promoters for a 66 per cent stake in DEN".

Earlier, Reliance Industries had reported a record quarterly net profit of Rs 9,516 crore in Q2, which was a jump of 17.4%.

RIL revealed that it will make a primary investment of Rs 2,940 crore through a preferential issue for a 51.3 per cent stake in Hathway. It will  also make open offers to minority shareholders of GTPL Hathway Ltd, a company jointly controlled by Hathway with 37.3 per cent stake, and Hathway Bhawani Cabletel and Datacomm Limited, a subsidiary of Hathway. 

Following are the strategic investments in brief:

(a) Primary investment of Rs. 2,045 crore through a preferential issue under SEBI regulations and secondary purchase of Rs. 245 crore from the existing promoters for a 66% stake in Den Networks Limited (“DEN”)

(b) Primary investment of Rs. 2,940 crore through a preferential issue under SEBI regulations for a 51.3% stake in Hathway Cable and Datacom Limited (“Hathway”)

RIL would also make open offers in DEN and Hathway as well as for the following companies as required under SEBI Takeover Regulations:

(a) GTPL Hathway Limited, a company jointly controlled by Hathway with 37.3% stake

(b) Hathway Bhawani Cabletel and Datacomm Limited, a subsidiary of Hathway

The staement also added, "Reliance is privileged to partner with the Rajan Raheja Group, one of the most respected business houses in India, and Shri Sameer Manchanda, a first generation entrepreneur, who have created strong businesses through their business acumen and perseverance."

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Reason for the move?

RIL statement said that these strategic investments are in furtherance of Reliance’s mission of connecting everyone and everything, everywhere – at the most affordable price. It added, "After having taken India to the top position in the mobile broadband space, Reliance is now committed to take India from a global rank of 135th to among the top-3 countries in the world on wireline digital connectivity."