Mumbai, India (PressExposure) July 12, 2011 -- Reliance Infrastructure does not plan to sell stake in its power transmission business, road and subway projects, the Anil DhirubhaiAmbani Group (ADAG) company said on Friday. Media reports suggested that ADAG plans to sell stake in these businesses of Reliance Infrastructure to pare debt in group companies such as Reliance Communications. "There is no truth to these speculative conversations and hence we will not comment on the same," a Reliance Infrastructure said in response to an ET query.
A company source added that Reliance Infrastructure may take action against media reports in the last two weeks, suggesting that Reliance Infrastructure may sell stake in its businesses. "Certain section of media has been misreporting on the stake sale news and the company may approach relevant authorities to take action against such speculative reporting ," the source said. Shares of Reliance Infrastructure have gained over 11% in the last two weeks driven by this news. The shares Friday closed at Rs 582.60 on the BSE, down almost 1% from the previous close of stock. Reliance Infrastructure has 25 infrastructure development projects in its kitty worth a total of Rs 40,000 crore. This includes 11 road projects worth about Rs 12,000 crore covering 970 km.
The company is also a generator and distributor of power. Reliance Communications has been among the biggest laggard on the benchmark Sensex, weighed by concerns over company's net debt of Rs 32,048 crore. The company is believed to be in talks to sell stake in its tower business to raise funds. "High debt on books remains prime risk especially given the pressure on profitability of the company (Reliance Communication). Nevertheless , stake sale in tower business would key trigger for the stock in near term," Emkay Global Financial Services said in a report in May.
Reliance Infrastructure, a part of Reliance Group, is India's largest infrastructure company with turnover of over Rs.15,690crore and market capitalization of over Rs. 24,450 crore as on March 31, 2010. Reliance Infrastructure Limited is India's leading utility company having presence in across the value chain of power business i.e. Generation, Transmission, Distribution, EPC and Trading and the largest infrastructure company by developing projects in all high growth areas in infrastructure sector i.e. Roads, Highways, Metro Rails, Airports and Speciality Real Estate.
Reliance Communications is India's foremost and truly integrated telecommunications service provider. The Company, with a customer base of over 138 billion including over 2.5 million individual overseas retail customers, ranks among the Top 4 Telecom companies in the world by number of customers in a single country. Reliance Communications corporate clientele includes 2,100 Indian and multinational corporations, and over 800 global, regional and domestic carriers.
Reliance Communications has established a pan-India, next generation, integrated (wireless and wireline), convergent (voice, data and video) digital network that is capable of supporting best-of-class services spanning the entire communications value chain, covering over 24,000 towns and 600,000 villages. Reliance Communications owns and operates the world's largest next generation IP enabled connectivity infrastructure, comprising over 277,000 kilometers of fibre optic cable systems in India, USA, Europe, Middle East and the Asia Pacific region.