The net debt of Reliance Industries , India's largest oil refiner, is expected to rise to Rs 1 lakh crore before the launch of its digital services business, Reliance Jio Infocomm, in December (net debt is outstanding debt less cash & cash equivalents). The company has spent about Rs 75,000 crore so far to build Jio's infrastructure and digital applications. It has borrowed Rs 30,000 crore and contributed another Rs 30,000 crore as equity so far. Before that, RIL spent Rs 15,000 crore to buy the spectrum, said company officials.
The company is looking to draw in another Rs 25,000-30,000 crore before the roll-out. The overall capital expenditure for the first quarter of this financial year was Rs 32,651 crore. The company was debt-free on a net basis until 2012 because of its higher cash flow from refining. The petrochemical and refinery expansions, and digital services business of Jio have consumed most of the debts that RIL has raised.
Jio's beta testing has begun at the company headquarters in Mumbai, Reliance Corporate Park (RCP). The company is constructing 30,000 towers and a 250,000-km long optical fibre network across India. About 80 per cent of the country will be digitally connected during the time of launch, said officials.
For the petroleum and refining business expansion, RIL has spent about $12 billion and is looking to invest $5 billion. The additional capacities will come completely on stream by 2016/17.
The company has an outstanding (consolidated) debt of Rs 1,70,814 crore at the end of the first quarter, compared to Rs 1,60,860 crore as on March 31, 2015. Cash and cash equivalents as on 30 June 2015 were at Rs 87,391 crore. About 15 per cent of the reserves have been deposited in banks, while the rest are in mutual funds, corporate deposits and government bonds and other marketable securities. The interest cost was at Rs 902 crore in the first quarter as against Rs 505 crore in the corresponding period of the previous year. Interest cost was higher mainly on account of the rupee depreciation during the quarter.
RIL's turnover fell by 23 per cent to Rs 83,064 crore because of the 43.5 per cent year-on-year decline in benchmark (Brent) oil price. Lower product prices affected the export value, which fell by 44.9 per cent to Rs 36,717 crore. Cost of raw materials declined by 39.1 per cent to Rs 50,305 crore.
The operating profit increased by 13.2 per cent to Rs 10,177 crore because of the higher contribution from refining and petrochemicals business. Profit after tax was higher by 4.4 per cent at Rs 6,222 crore. Basic earnings per share (EPS) for the quarter ended June 2015 was Rs 21.1 as against Rs 20.3 in the corresponding period of the previous year.