Owing to its ongoing huge capital expenditure, Reliance Industries Ltd (RIL) registered a net debt on its balance sheet for the fiscal 2013-14, after being debt-free on a net level for two consecutive years, the company's annual report showed.
"RIL moved from a net cash position at the beginning of the year to a marginal net debt level during the course of the year as it drew down on funding to part-finance the expansion of its petrochemical capacities and setting up the new gasification plant and refinery off-gas cracker over the next two to three years," the company said.
As on March 31, RIL's total debt on a standalone basis stood at Rs 89,968 crore, while its "cash and marketable securities" were Rs 88,190 crore, resulting in net debt of around Rs 1,778 crore.
In June 2013, the oil-to-yarn conglomerate had announced to invest Rs 1.5 lakh crore over next three years for expansion of all its businesses with a special focus on its new ventures like retail and telecom.
Industry sources said the company aims to increase the share of revenue from new businesses to 40% from around 3% now. The company has so far tied up facilities of around $3.15 billion equivalent to part-finance its petrochemical expansions and petcoke gasification projects. Last fiscal, the company also signed $500 million worth of facilities from UK and France Export Credit Agencies (ECAs), which will be drawn over the next two to three years. The company would draw additional debt of Rs 10,000 crore in 2014-15 to finance its capital expenditure.
Under its refinery operations, petcoke gasification is one of the most crucial projects as it is likely to bring significant energy savings for the company.
"One of RIL's key strategies, going forward, is setting up the petcoke gasification project which is expected to put RIL's energy and hydrogen costs at par or better than the refineries in the US, where natural gas prices have fallen dramatically with the shale gas revolution," RIL said. The project would reduce Jamnagar refinery's dependence on expensive imported LNG with cheaper petcoke or coal. With retail business turning profitable at net level, the company is bullish on the business. In the telecom business, the company has entered into several telecom infrastructure sharing pacts with different operators to expedite roll out of 4G services with minimum investment.