Reliance Infrastructure Limited (RInfra) has announced the complete utilization of Rs 978.60 crore raised through its preferential warrant issue, according to the company's monitoring agency report for the quarter ended June 30. The report, submitted by Infomerics Valuation and Rating Limited, confirms that the funds were used in line with the stated objectives, with no deviations observed.

Warrant Issue Details

RInfra had initially issued 12.56 crore warrants as part of a larger Rs 3,014.40 crore preferential issue. The company has received Rs 978.60 crore to date, representing a portion of the total warrant issue.

Fund Utilization Breakdown

The utilization of the Rs 978.60 crore was as follows:

Key Developments

• Investment in Subsidiary: During the quarter, RInfra invested Rs 225.00 crore in its subsidiary, Reliance Defence Limited, through cumulative compulsory convertible debentures.

• Equity Allotment: The company allotted 1.25 crore equity shares to Risee Infinity Private Limited, a promoter entity, for Rs 300.00 crore.

Monitoring Agency's Observations

Infomerics Valuation and Rating Limited, acting as the monitoring agency, confirmed that:

1. All proceeds were utilized according to the offer document.
2. No unutilized funds remain in escrow accounts.
3. The amount used for general corporate purposes does not exceed 25% of the gross proceeds from the preferential issue.

Management Commentary

The company stated that a substantial portion of the issue proceeds would be directed towards expanding its presence in the defence sector and setting up new business opportunities. This strategy aligns with the 'Make in India' and 'Viksit Bharat' visions by strengthening domestic production capabilities and reducing import reliance.

Conclusion

Reliance Infrastructure's full utilization of the received warrant proceeds demonstrates the company's commitment to its stated objectives. The investments in its defence subsidiary and the focus on business expansion indicate RInfra's strategic moves to strengthen its position in the infrastructure and defence sectors.

Investors and stakeholders can take note of the company's adherence to its funding plans and the transparent reporting of fund utilization, as verified by the independent monitoring agency.

Reliance Infrastructure Limited (RInfra) has emerged victorious in a significant arbitration case against Aravali Power Company Private Limited (APCPL), securing an award of Rs. 526.23 crore. This development marks a substantial win for the infrastructure giant in a long-standing dispute.

Arbitration Details

The arbitration proceedings were initiated by Reliance Infrastructure following what it claimed was a wrongful termination of an EPC (Engineering, Procurement, and Construction) contract by APCPL in 2018. A three-member arbitral tribunal, in a majority decision, ruled in favor of RInfra, declaring APCPL's contract termination as "illegal, invalid, and wrongful."

Financial Implications

The arbitration award amounts to Rs. 526.23 crore, along with interest. This sum represents damages and costs incurred by Reliance Infrastructure due to the alleged wrongful termination of the contract. The company has stated that the proceeds from this award will be utilized to make Reliance Infrastructure bank debt-free and provide growth capital for future endeavors.

Company's Response

In a media release following the arbitration outcome, Reliance Infrastructure emphasized the significance of this victory. The company views this award not only as a financial boost but also as a validation of its stance in the dispute with Aravali Power Company.

Market Impact

This favorable arbitration outcome is expected to have a positive impact on Reliance Infrastructure's financial position. It demonstrates the company's ability to successfully defend its interests in contractual disputes, which could boost investor confidence.

About Reliance Infrastructure

Reliance Infrastructure Limited is a major player in India's infrastructure sector, with a diverse portfolio spanning power, roads, metro rail, and defense. The company operates through various Special Purpose Vehicles (SPVs) and is known for executing large-scale infrastructure projects on build, own, operate and transfer (BOOT) and build, operate and transfer (BOT) bases.

RInfra's involvement extends to providing Engineering and Construction (E&C) services for power, infrastructure, metro, and road projects. Additionally, the company has a significant presence in the power distribution sector, solidifying its position as a leading utility company in India.

As Reliance Infrastructure moves forward with this arbitration win, the industry will be watching closely to see how the company leverages this financial boost for its future growth and debt reduction strategies.