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RIL to form digital subsidiary with Rs 1.08 lakh crore investment; Jio to be net debt-free

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The board of Reliance Industries today approved the formation of a wholly-owned subsidiary for its digital business and the infusion of Rs 1.08 lakh crore in it, which will be used to reduce Jio’s debt.

The Rs 1.08 lakh crore investment will be in the form of a rights issue of optionally convertible preference shares (OCPS).

The new subsidiary, which will become Reliance’s umbrella platform for all digital businesses including Jio, will also acquire RIL’s equity investment of Rs 65,000 crore in Jio so far, bringing up Reliance’s total investment in the digital business to Rs 1.73 lakh crore.

Following this arrangement, Reliance Jio will become virtually net debt-free by March 31, 2020, with the exception of spectrum-related liabilities.

Reliance will “continue to focus on cutting-edge, technology-enabled digital platforms” with a focus on areas such as healthcare, education, agriculture, commerce, government-to-citizen services, gaming, and manufacturing, the company’s statement said.

“These platforms are also backed by investment in.. technologies (such as) blockchain, artificial intelligence and machine learning, virtual, augmented/mixed reality, computer vision, high performance and edge computing, natural language processing, and voice-enabled services,” it added.

Reliance Industries Chairman Mukesh Ambani said that the creation of a new company will help create a transformational digital services platform and help attract potential strategic partners.

Ambani further said that Reliance “will induct the right partners in our platform company, creating and unlocking meaningful value for RIL shareholders.”

The restructuring will ensure monetisation opportunities will accrue to shareholders effectively and there will be no impact on Reliance’s overall debt position, the company said, adding that the consolidation of liabilities in RIL will help create an efficient structure to manage debt and cash.

Ambani had announced at the Reliance Industries AGM recently that the company was looking to unlock value in its telecom and retail ventures (Reliance Retail) by inducting partners, and was looking to list the two businesses in the next five years.

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Sensex hits all-time high crosses 40,400

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The Indian equity markets opened on a firm note on Monday as the benchmark Sensex touched a fresh all-time high of 40,434.83 during the early trade.

Sensex jumped nearly 250 points, gaining for the seventh straight session over the strong inflow of foreign funds and better than expected earnings post the corporate tax cut.

Global markets have also gained after both the US and China indicated an early resolution.

At 9.27 a.m., the Sensex was up 216.40 points or 0.54 percent at 40,381.43 before it touched the intra-day high of 40,434.83.

Nifty was also trading higher by 81.70 points at 11,972.30, slightly lower from its 52 weeks high of 12,103.05.

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Sensex Hits all-time High

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Domestic stock markets started Thursday’s session on a positive note amid mild gains in Asian peers. The S&P BSE Sensex index rose as much as 245.65 points touch 40,297.52 in the first few minutes of trade, and the broader NSE Nifty benchmark climbed to as high as 11,914.90, up 70.8 points from the previous close. Gains in banking and information technology stocks pushed the markets higher. Analysts expected some volatility ahead of the expiration of monthly derivatives (futures & options) contracts due at the end of the session.

Equities in other Asian markets rose on Thursday and US stock futures edged higher after the US central bank cut interest rates as expected to keep the economic expansion on track. MSCI’s broadest index of Asia-Pacific shares outside Japan has last seen up 0.2 percent while Japan’s Nikkei stock index rose 0.41 percent, but Australian shares fell 0.24 percent. 

Meanwhile, the Sensex had ended 220.03 points – or 0.55 percent – higher at 40,051.87 and the Nifty settled at 11,844.10, up 57.25 points (0.49 percent) from its previous close on Wednesday, continuing their upmove for a fourth consecutive session.

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ED conducts raids on DHFL premises over the transfer of Rs 2,186 crore to D-Company

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The Enforcement Directorate (ED) on Saturday conducted raids at several premises of DHFL after finding out that the loan of over Rs 2,100 crore given by the firm reached D-Company in Dubai.

Sources said the searches by several teams of ED officials were being conducted at around eight places connected to Diwan Housing Finance Limited (DHFL) in Mumbai and other places.

Top sources within the agency maintained that investigators are reviewing the documents and soon DHFL will be called in for questioning for allegedly giving loans to Sunblink Real Estate Private Limited, which facilitated routing Rs 2,186 crore to Dawood Ibrahim’s aide Iqbal Mirchi in Dubai.

DHFL came under the ED’s lens for the first time when they were investigating about three properties linked to Iqbal Mirchi.

The ED’s probe revealed that three properties suspected to be linked to Iqbal Mirchi had taken a loan of Rs 2,186 crore from NBFC. This loan was allegedly transported and routed abroad in offshore accounts. When the NBFC was investigated, DHFL came under the scanner.

The federal probe agency claimed that during the investigation, it was found that three properties in question, Rabia Mansion, Marium Lodge and Sea View, were used by the 1993 terror attack mastermind Dawood Ibrahim’s close associate Iqbal Mirchi to launder over Rs 2,100 crore.

According to the ED’s document, “During the statement recorded under custody, the accused (Ranjeet Bindra) accepted meetings and further negotiations with Iqbal Mirchi in London in respect of the said three properties as a broker and on behalf of Sunblink Real Estate Private Limited.”

An investigation by the ED further revealed information about the huge transaction of Rs 2,186 crore undertaken by Sunblink Real Estate Private Limited with regard to the three properties.

DHFL belongs to the Wadhawan family, who also own RKW Developers located at the HDIL building. The director of RKW Developers had a director called Ranjit Bindra. Interestingly, Ranjit Bindra was a broker who negotiated a deal with Iqbal Mirchi in London.

The primary investigation indicated that Bindra, who is known to have made deals with Wadhawans, also sealed deals for Iqbal Mirchi.

Sunblink’s own account details showed that it was receiving hundreds of crores every year starting from 2010 from DHFL. In nine years, DHFL own loan consolidation documents prove that it had approved Rs 2,186 for Sunblink Real Estate.

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