“The slowdown in some sectors of the economy is temporary. The fundamentals of the Indian economy are very strong,” Ambani said
Describing the fundamentals of the Indian economy as strong, Reliance Industries Ltd (RIL) Chairman Mukesh Ambani on Monday said that the ongoing slowdown in some sectors of the economy is temporary.
Addressing RIL shareholders at the 42nd Annual General Meeting (AGM), he said that the opportunities will grow further with structural reforms and noted that India has the required political stability.
“The slowdown in some sectors of the economy is temporary. The fundamentals of the Indian economy are very strong,” Ambani said.
His statement comes at a time when the growth of the Indian economy has slowed and consumption is significantly low in several sectors led by automobiles, real estate and FMCG.
Ambani further said that he endorsed Prime Minister Narendra Modi’s target of making India a $5 trillion economy by 2024 and observed that India would touch the $10 trillion mark by 2030.
“Indeed, I can clearly see India becoming a $10 trillion economy by 2030, with every Indian as a beneficiary,” he said.
The RIL Chairman added that the government is laying the foundation of new institutions for business promotion and regulation and new long-term measures are being taken to improve ease of living for all citizens, and reduce income inequality.
“India is rising. No power on earth can stop India from rising higher,” he said.
Zero Net-Debt Company
RIL chairman Mukesh Ambani on Monday said that the group has a clear roadmap to become zero net-debt company in 18 months.
The statement came in the wake of rising debt at the group level that reached a level of group Rs 1,54,478 crore in the last financial year.
Addressing the group’s 42nd AGM in Mumbai, Ambani said he was confident of growing the company’s consolidated earnings 15 per cent annually over the next five years.
He said the group’s telecom vertical Reliance Jio and retail venture Reliance Retail would account for 50 per cent of the company’s earnings soon.
The RIL chairman also assured shareholders that they would continue to get periodic bonus issues and higher dividends once the group became debt-free.
Shares of the company are up 20 per cent since the last AGM in July 2018, but have underperformer Nifty by 11 per cent over the past three months.
The stock has been down 9 per cent in last one month.
The company accumulated gross debt of more than Rs 2.87 lakh crore, as it feverishly diversified into consumer-focused businesses in retail, telecom and e-commerce over the past few years besides majorly upgrading the core refining and petrochemicals businesses.
In FY19, the company’s finance cost more than doubled to Rs 16,495 crore from Rs 8,052 crore in the previous year.
The group attributed the increase primarily to the commencement of digital services business, petrochemical projects at Jamnagar and higher loan balances.
Ambani told the AGM that RIL has transferred its telecom infrastructure assets into two separate infrastructure trusts for a consideration of Rs 1.25 lakh crore with the intention of raising money from large global institutional investors.
“We have received strong interest and commitments from reputed global investors and are confident that these transactions will be completed by the end of this financial year. Post this, we ended last year with net debt of Rs 1,54,478 crore,” he said.