Anil Ambani’s firm may soon get Rs 40000000000, state cabinet approves buyout of…

Anil Ambani’s Reliance Infrastructure Limited may soon get Rs 4000 crore as the state cabinet has approved in principle the purchase of the Ghatkopar-Versova Mumbai Metro One. For those who are unaware, Mumbai Metro One was the first metro project undertaken under the Build-Operate-Transfer (BOT) policy. The Ghatkopar-Versova Mumbai Metro One is Mumbai Metropolitan Region Development Authority (MMRDA) and Anil Ambani-led Reliance Infrastructure Limited (R-Infra). Stake of Mukesh Ambani’s brother Anil Ambani in the Metro One has been valued at Rs 4000 crore.

Anil Ambani has a 74% stake in the Mumbai Metro One Pvt Ltd (MMOPL), while MMRDA has a 26% stake in the joint venture. Retired IAS officer and former chief secretary Johny Joseph led panel reportedly used the discounted cash flow model to value Anil Ambani’s 74% stake in MMOPL at Rs 4000 crore. The report has now been approved by the state cabinet.

To recall, the joint venture of Anil Ambani’s Reliance Infra and MMRDA was full of disputes. Reports suggest that many MMRDA commissioners were against doing the project with a private firm. Surprisingly, MMOPL always claimed losses despite being the most crowded metro to date. MMOPL’s ticketing structure and exploitation of the metro premises were also questioned by MMRDA. The dispute led to rejection of MMOPL’s demand to raise fares.