Reliance Infra AGM: Company to receive Rs 7100 cr from DMRC, money will be used to repay debt, says Chairman Anil Ambani

Reliance Infrastructure Limited will receive a sum of Rs 7100 cr from the Delhi Metro Rail Corporation Limited (DMRC) which will be utilised to repay the debt of Reliance Infrastructure and to make the company debt-free, Chairman Anil Ambani said on Tuesday during an Annual General Meeting (AGM) of the company. 

Delhi Airport Metro Express Private Limited (DAMEPL) which operated Delhi Airport Metro Line Reliance Infrastructure is an arm of Reliance Infrastructure. 

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Reliance Infrastructure has won against the DMRC as the Supreme Court (SC) upheld an arbitral award in favour of DAMEPL, the Chairman said.  

There are regulatory assets worth Rs 50,000 cr under approval/dispute before various forums for power distribution business - BSES Delhi and erstwhile GTD in Mumbai, he said adding that further arbitration claims pending before various forums amount to Rs 15,000 cr. 

During the last AGM of RInfra, Anil Ambani had announced that the promoters would increase their shareholding in the company. The preferential issue of over Rs 550 cr comprising of 8.88 cr warrants of Rs 62 each, convertible into equity to increase the promoter holding to 22.06 per cent. 

Reliance Power – Reliance Infra and other Promoters have increased stake by converting Rs 1325 crore ICD. The current holding is 24.98 per cent, the holding will to go up to 38 per cent on conversion of warrants. 

During the last year, Reliance Infra has successfully completed: 

a. 100 per cent stake sale of Delhi Agra Toll Road to Cube Highways and Infrastructure III pte Ltd for Rs 3600 cr. 

b. Entire 74 per cent stake sale in Parbati Koldam Transmission Company Limited to India Grid Trust for Enterprise value of Rs 900 cr . 

c. Sale of the Commercial property at Santacruz under a composite transaction for sale, buyback and lease of the said property. 

These transactions have resulted in debt reduction by 35 per cent. 

Reliance Infra’s new growth engines will be: 

a. Power distribution business as the new Electricity Act will be opening up plethora of opportunities 

b. New Contracts in EPC Business and 

c. Defence manufacturing business 

On 9 September 2021, a big breather came come for the Anil Ambani Group from the Supreme Court of India.  The apex court in its judgement ruled the arbitration ward of Rs 2,800 cr in favour of the company. In its judgement the top court upheld the 2017 arbitration award in favour of the Reliance Infra.   

The arbitration was earlier challenged in the Delhi High Court. The SC has also ruled that this amount of Rs 2,800 cr will be paid back to the company with the interest accrued over a period of 8 years.  

The issue is related to a dispute arising out of termination of operations in 2012 by Reliance Infra. The company ended its operations on metro line connecting Delhi Airport. The company cited reasons that the structures constructed by DMRC had developed cracks and it was not possible to run metro at this route because of safety reasons.   

However, DMRC had rejected the claims made by Reliance Infra. Reliance Infra had accused DMRC of not mending the faulty structures and said that it will not continue its operations.   

This case later went into the arbitration. It then went before the Delhi High Court where a single-judge bench had ruled in favour of Reliance Infrastructure. It was later challenged before the double-judge bench of the high court which had ruled against the company.   

Finally, it went to SC, which today ruled in favour of Reliance Infra.