Deleveraging cycle at Reliance Industries likely to ease investor concerns

ET Intelligence Group: The start of a deleveraging cycle at Reliance Industries (RIL) after seven years of record capital expenditure should ease investor concerns of subpar return ratios at the telecom arm of the company.

RIL has demerged the tower and fibre businesses of Jio in favour of a special purpose vehicle (SPV) at the end of March 2019. The majority stake in the SPV will be transferred to a Sebi-registered Infrastructure Investment Trust (InvIT). RIL is seeking investors for the InvIT as Sebi guidelines require at least five non-sponsor entities for a privately placed InvIT.

ET on June 12 reported that the term sheet for the proposed sale of Reliance Jio’s telecom tower business to infrastructure asset manager Brookfield could be signed in the next 10 days. This would be the first step in the deleveraging process.