Better days ahead, says Anil Ambani at AGM of key listed companies

MUMBAI: Anil Ambani is confident about better days ahead for all the companies in his group despite the current challenging environment, particularly in the infrastructure sector. Addressing the annual general meetings of his key listed companies – Reliance Power, Reliance Infrastructure, Reliance Communications, Reliance Capital – he assured shareholders that despite the macro environment being challenging, his expects his group to perform better.

Reliance Power is on track to double its power generating capacity to 5,000 mw in a year despite the sector’s problems such as fuel scarcity, delays in land acquisition and environment clearances, and the rupee’s depreciation, Ambani said.

“In spite of all the challenges in the power sector, we are on our way to complete the Sasan ultra mega power project (UMPP). We are committed to be leaders in power and coal mining,” he said.

Reliance Power has a capacity of 2,545 mw. Its two projects totalling 6,400 mw are stuck. Construction has not begun at the Krishnapatnam UMPP because of high cost of imported coal, while the 2,400 mw Samalkot Project has been ready for commissioning for months but has no natural gas.

“We will start work on the Tilaiya UMPP shortly. We are working on resolving issues with the Krishnapatnam project and we will get it resolved,” said JP Chalasani, chief executive officer.

The power regulator’s recent decision to allow companies like Tata Power and Adani Power to get “compensatory tariff” to make up for the steep rise in imported coal prices has given Reliance Power the comfort that it may also get a favourable order in the Krishnapatnam case.

Reliance Infrastructure expects that all of its 14 projects would start generating revenue by the end of this current financial year. This includes the company most ambitious Mumbai metro project’s first phase.

“We have the strongest balance sheet in the sector to capitalise on the growth opportunities,” Ambani said.

The company said it was confident of receiving the entire investment of Rs 2,800 crore in the Delhi Airport Metro Express (DAME) project, which it terminated recently. DAME has sought a termination payment equal to 130% of the adjusted equity and 100% of the debt due for the project from the Delhi Metro Railway Corporation after exiting the project.

“In our newest business, the cement business, we are currently setting up a manufacturing capacity of 5 million tonnes but in the next few years we hope to have capacity in excess of 20 million tonnes,” Ambani said.

Ambani expects that the telecom sector would fare better than others in the coming quarters as he sees the pricing stability seen over the April-June period to sustain. Addressing shareholders of Reliance Communications, the chairman said that individual companies will need to “figure out for themselves what the best strategy is for them in times of slowdown such as this (rupee depreciation and economic slowdown)”.

The company has been weighed by huge debt that stood at Rs 38,400 crore on June 30, but its efforts to pare it by inducting an investor or selling stake in its tower or whole telecommunications units haven’t borne fruit till now.

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