JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY

ANANTAPUR, ANANTAPURAM-515002
DEPARTMENT OF MANAGEMENT

A SEMINAR ON ZERO DEBT RELIANCE INDUSTRIES Ltd

SUBMITTED BY: UNDER THE GUIDANCE OF:
P. MANOJ KUMAR YADAV K. MADHAVI ( M.B.A)
180A1E0044
1
INTRODUCTION
 On August 12, 2019, at the 42nd AGM of Reliance Industries, Chairman Mukesh Ambani had
assured the shareholders about his roadmap for ;
1. Reliance becoming a net-debt free company before March 31, 2021,
2. Adding that they will list both Jio and Reliance Retail within the next five years.
 On June 19, 2020 Reliance Industries Ltd announced that it had become net debt-free eight
months ahead of March 2021 deadline it had set for itself.
Type Public
Traded as BSE: 500325 , NSE: RELIANCE , LSE: RIGD ,
BSE SENSEX Constituent , NIFTY 50 Constituent
ISIN INE002A01018
Industry Conglomerate
Founded 8 May 1973; 47 years ago
Founder Dhirubhai Ambani
Headquarters Mumbai , Maharashtra , India
Area served Worldwide
Key people Mukesh Ambani (Chairman & MD)
Products Petroleum, Natural gas, Petrochemicals, Textiles, Retail, Media,
Telecommunications, Entertainment, Music, Banking
Revenue  ₹659,205 crore (US$92 billion) [1] (2020)
Operating income  ₹102,280 crore (US$14 billion) [1] (2020)
Net income  ₹44,324 crore (US$6.2 billion) [1] (2020)
Total assets  ₹1,165,915.00 crore (US$160 billion)  [2] (2020)
Total equity  ₹453,331.00 crore (US$64 billion) [2] (2020)
Owner Mukesh Ambani (47.35%)[3]
No.of employees 194,056 (2019)[4]
Subsidiaries Jio Platforms (75.35%), Reliance Retail, Reliance Petroleum,
Jio Payments Bank (70%), Network 18,
Football Sports Development Ltd, Mumbai Indians
Website www.ril.com
DEBT FINANCE

 Definition: When a company borrows money to be paid back at a future date

with interest it is known as debt financing. It could be in the form of a
secured as well as an unsecured loan. A firm takes up a loan to either finance
a working capital or an acquisition.

Net debt = (short term debts + long term debts ) – cash or cash
equivalents
 ADVANTAGES OF BEING DEBT FREE

1. Higher solvency
2. Higher profit margin
3. Lower Break-even point
4. No charge on asset
5. No risk of credit rating
6. No more obligation to repayment
 DISADVATAGES OF BEING DEBT FREE

1. Low earnings per share

2. No more tax benefit
3. Higher cost of capital
4. Dilution of decision making powers
HOW RELIANCE INDUSTRIES LTD
BECAME DEBT FREE
 At the end of March, RIL had a net debt of Rs 1.6 lakh crore.
 The company has raised Rs 1.15 lakh crore through equity investments in its
digital unit Jio Platforms
 And another Rs 53,124 crore from a rights issue.
Here are Jio platforms' 11 deals with global investors announced so
far:  
Rights issue :

 RIL board, on April 30, approved issuance of company’s equity shares of ₹

10 each of an issue size of ₹ 53,125 crore by way of rights issue at price of ₹
1,257 per share and the share ratio at 1:15.
BENEFITS TO RELIANCE INDUSTRIES
LTD
1. No fixed interest payments leads to lower break even point.
2. High diversification due to increased availability of funds.
3. Increased chances of different technologies on Jio platforms.
4. Increase in shareholders worth.
5. Being debt free is a advantage for increased credit rating in the current pandemic situation.
DISADVANTAGES TO RELIANCE
INDUSTRIES LTD
1. Loss of tax benefits .
2. Dilution of decision making powers.
3. Increase in number of share holders leads to low earnings per share.
CONCLUSION

 It is a very good sign that a company like Reliance Industries Ltd became debt
free and there is a chance of splitting of Jio platforms.
 The performance of the Reliance Industries Ltd in the future will increase
with the technologies of other companies.
 With becoming debt free company has more chances of diversification and
can increase performance and also increase profits of the company.
 Finally being debt free is good sign for RIL .
THANK
YOU