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Jio’s parent company RIL to raise ₹25,000Cr via private shares issue

Mukesh Ambani led Reliance Industries Limited (RIL) is raising ₹25,000 crore via issue of new shares. The company was seeking approval from shareholders to issue “secured/unsecured redeemable non-convertible debentures, in one or more series/tranches, of an aggregate nominal value up to ₹25,000 crore”. The fundraising, however, is made on a private placement basis, i.e. the shares will be sold to private and existing investors only. The board of directors have already approved the fund raise and is now awaiting final approval from shareholders.

This is RIL’s sixth investment into its telecom unit since 2015:
-In January, Jio planned to invest ₹30,000 crore for expanding its 4G coverage and network capacity, taking the overall investment in the telecom unit to approximately ₹1.9 lakh crore.
-In July last year, just a month before the public rollout of its network, RIL invested ₹15,000 crore into Jio through a rights issue.
-In the same month, Jio raised  ₹2,000 crore through 5 year bonds on a private placement basis.
-In October 2015, Jio raised Rs ₹3000 crore by issuing redeemable non-convertible debentures.
-In May 2015, the company had raised a $750 million loan (₹4500 crore) from nine banks on a 10 year repayment period.

Jio’s free offers are coming to an end

The recent investment comes after Jio’s freebies are coming to end, although it is constantly rolling freebies in other forms and packages. TRAI had initially advised Jio to pull back its Summer Surprise offer in April that gave 3 months of free data and calls as complimentary, the telco then re-launched a new tariff pack named ‘Jio Dhan Dhana Dhan offer’. At that time, we pointed out that the new plan does not differ much when compared to the previous plan.

Jio had earlier announced that its free call/data offer would be extended up till March 2017 under ‘Happy New Year offer’, after its initial ‘Welcome Pack’ promo offer ended on December 31st 2016. As of April 2017, Jio’s total active connection base stood at 80.12 million. This is only 71.19% of Jio’s overall mobile connection base which stood at 112.55 million.

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