Reliance Commercial to infuse Rs 1,043 cr in Reliance Infra, Reliance Power

Two listed Anil Ambani group companies, Reliance Infrastructure and Reliance Power, are between them raising ₹1,043 crore from Reliance Commercial Finance, a wholly owned subsidiary of Authum Investment & Infrastructure, by allotting preferential shares.

Last October, Reliance Commercial Finance, an erstwhile Anil Ambani company, was acquired by Authum in an out-of-court debt resolution process.

Reliance Commercial has proposed to invest ₹891 crore in Reliance Infrastructure and ₹152 crore in Reliance Power, according to stock exchange disclosures.


After this transaction, Reliance Commercial will hold 11% equity in Reliance Infrastructure and 2% in Reliance Power.

Reliance Commercial Finance is a subsidiary of Reliance Home Finance, which in turn is a subsidiary of Reliance Capital, an Anil Ambani company that is undergoing corporate insolvency.

Prior to 2020, Reliance Infrastructure and Reliance Power had provided a guarantee on the loans availed of by Reliance Commercial Finance and Reliance Home Finance. Authum, as the new owner of Reliance Commercial, invoked these guarantees. To settle the dues with Authum, Reliance Infra and Reliance Power offered to convert debt into equity.

The board of Reliance Infrastructure has approved a proposal to issue 44.3 million preferential shares at ₹201 per share, while the board of Reliance Power has approved a proposal to issue 75.9 million preferential shares at ₹20 per share to Reliance Commercial, according to the stock exchange disclosures.

Authum "invoked its claim and required the company to pay its dues towards outstanding guarantees along with interest, penal interest, costs, charges and other expenses", Reliance Infrastructure said in a notice to exchange.

"To avoid litigation and dispute, both parties agreed to amicably settle the above dues whereby the entire amount of interest, penal interest, costs, charges, and other expenses stand fully discharged, and the amount as a debt payable by the company is crystallised to ₹891.26 crore," it added.

Following the allotment of shares, Reliance Infrastructure will "settle obligations towards guarantees of ₹4,456 crore for an amount of ₹891.2 crore", it said in a stock exchange filing.

Lenders of Reliance Commercial and Reliance Home Finance initiated out-of-court restructuring sometime in June 2020 before the Reserve Bank of India initiated the corporate insolvency of their parent Reliance Capital. Thus, these two companies were excluded from the sale of Reliance Capital. Hinduja Group promoted IndusInd International Holdings emerged as the winning bidder for Reliance Capital, offering ₹9,660 crore.

The out-of-court resolution plan involved Reliance Commercial Finance acquiring the entire business of Reliance Home Finance in a slump sale and going concern basis. The Supreme Court approved the plan on March 3 effective from October 14, 2022.

Currently, Reliance Infrastructure and Reliance Power shareholders are separately voting on the proposal to allot preference shares to Reliance Commercial, according to disclosures made to the exchange.

Authum acquired ₹11,540 crore debt of Reliance Home Finance for ₹3,351 crore as reported by ET on March 31, 2023. It also acquired the ₹9,000 crore loan book of Reliance Commercial for ₹1,629 crore.