Anil rolls out Rs 1.25 L cr mega investment plans

Anil Ambani, chairman of Reliance Anil Dhirubhai Ambani Group (R-ADAG), on Tuesday announced a whopping investment plan of Rs 1.25 lakh crore for three group companies, namely, Reliance Power, Reliance Capital and Reliance Communications (RCom).

Speaking at the annual general meetings (AGM) of the three group companies in Mumbai, Ambani told shareholders that the investments were not just about creating wealth but was about sharing it with them.

"We enjoy the trust of over one crore shareowners across the group - the largest such family anywhere in the world," he said. The group's chairman, who was hopping from one AGM to another, said that of the Rs 1.25 lakh crore, around Rs 65,000 crore would be used for the expansion plans of the three companies.

The chunk of the investments would be for the expansion plans of Reliance Power's thermal, hydro and gas- fired power plants. He said the company aims to become the biggest power generating firm in the private sector by 2015.

An estimated Rs 80,000 crore would be used for creating 20,000 mega watt (MW) of thermal power generation capacity by 2015, Rs 30,000 crore for hydro power and Rs 10,000 crore for gas- based projects.

The BIG ambition A public issue, entry into commercial banking & sale of strategic stake to an investor are among proposals unveiled by R- ADAG Reliance Life - the first Indian insurance company to announce its plans for listing in 2009 - is awaiting sector IPO rules & Sebi nod With RBI throwing open a discussion on granting new banking licences, ADAG plans to enter the banking business through R- Cap The group's ambition is to set up a world-class bank with Reliance Capital RPower will invest Rs 80K cr for creating 20,000 MW of thermal power generation capacity by 2015, Rs 30K cr for hydro power and Rs 10K cr for gas- based projects RPower will have operational capacity of 5,000 MW by 2012 and commission 20,000 MW more by 2015 R-ADAG aims for an asset base of Rs 50,000 crore in the next three to five years

Reliance Power would raise Rs 50,000 crore in what would become the largest fund raising exercise in the corporate history of the country, he said.

"The company aims to increase its operational capacity to 5,000 MW by 2012 and further increase it by 20,000 MW over the next three years," he said.

It also aims to achieve 3,000 MW of hydro power capacity by 2016 and 1,000 MW capacity of clean energy - like wind and solar - generation capacity over the next five years.

Other fund- consuming businesses, as listed by Ambani, would be the telecom- arm RCom, which has also been listed as a major fund- raiser by the sale of shares, as also subsidiary Reliance Infratel. He said the insurance business would be another area that would raise funds through a share sale.

"Our group is by far the youngest of all large business houses in India, but we already rank among the top five on every important financial and operating parameter," Ambani said.

In banking, he said that the group's ambition was to set up a world- class bank.

In telecom, Ambani said that not much capex would be required going forward, but RCom would seek to raise funds through the sale of up to 26 per cent stake in the company.

Besides, the company would consider raising funds through the sale of shares to strategic and financial investors as also through an initial public offering (IPO) in its telecom tower arm Reliance Infratel.

He said RCom has spent nearly Rs 35,000 crore in capex in the last three years, and its investment this year is projected to be around Rs 3,000 crore. A similar trend of declining capex cycle is expected to continue, going forward, he said.