RCOM will be debt-free in 2-3 years: Anil Ambani

Mumbai: Reliance Communications Chairman Anil Ambani promised the shareholders that the company will become debt-free in 2-3 years. He has also unveiled a number of plans to cut debt, expand capacity and issue bonus shares in Reliance Capital during the sixth annual general meeting.

RCom currently has a total debt of around Rs. 33,000 crore including the $1.8 billion (about Rs. 8,200 crore) it raised for the 3G that it recently won via a government-run auction. This has raised concerns among investors as well as stock analysts.

"A combination of strategic and financial initiatives would result in a large cash infusion and significantly bring down debt levels in the next few quarters. Indeed, they could potentially make us debt-free in three years or so," said Ambani.

Shareholders approved RCOM's plans to issue fresh shares to financial investors in the form of a qualified institutional placement to raise funds.

"Over the next 24 months, we will rapidly accelerate the pace of new capacity addition, to leapfrog from the current 600 mw to eight times that number at over 5,000 mw. This pace will intensify even further in 2013. Over the following three years, we will add, on an average, 7,000 mw of thermal power capacity every single year," Ambani told shareholders.

RCom's stock went up 0.41 percent in Tuesday's trade to close at Rs. 170.30 a share on the BSE. Reliance Power shares gained 2.7 percent to close at Rs. 163.25 on Tuesday. The shares are off 13.98 percent over the 52-week high of Rs. 189.80 but have recovered 25.57 percent from the low of Rs. 130.

Reliance Capital CEO Sam Ghosh said the group plans to expand its customer base from 2 crore to 5 crore and increase the number of business partners from 5 lakh to 10 lakh. The company also aims to expand its distribution reach from 5,000 to 20,000 towns and cities.

Internet services expand choices for TV watchers

Bangalore: Internet has created a new era of television viewing with the introduction of new interfaces and better methods to connect with the content. Thus, the choice of television viewers to enjoy programming, on-demand movies and internet services is expanding rapidly.


The internet giant Google has announced its plans on launching a TV platform globally next year. They say it is an attempt to bridge the gap between the television and the Internet and bring its search technology into the living room. The Google TV platform has a search bar onto the top of the TV screen that allows users to search and surf the Internet as well as search live TV listings. The company is also contemplating on bringing entertainment options to Google TV and plans to launch support for Android mobile applications on the TV next year.

Netflix, an online film-streaming service in the U.S. has made deals with Microsoft, Sony and Nintendo to put it on the TV through Xbox 360 console, PlayStation 3 and the Wii respectively. Adding to it, Apple said this week that it would include the Netflix service on its new $99 Apple TV set-top box.

Apple has also unveiled a new AppleTV device a few days back which allows users to download and view an unprecedented variety of movies and TV shows. The new device provides viewers high-definition film rentals from all major Hollywood film studios at $4.99, and TV shows from ABC and FOX for 99 cents.

The electronics major, Sony recently announced that it would extend its Qriocity video-on-demand service to Europe soon. Sony has also tied up with Google in order to offer a Google TV service and interface.

The big TV makers too are integrating similar services into their sets and with their own interfaces and it is predicted that television viewing will have a different meaning in the coming years.

Karur Vysya targets Rs 2k-cr net worth

CHENNAI: The net worth of Karur-based old private sector Karur Vysya Bank is set to cross Rs 2,000 crore, following the board decision on Tuesday to issue bonus and rights shares (at premium), subject to statutory approvals. The bank has also decided to increase the cap on foreign investment from 24-35%.


KVB has decided to reward existing shareholders with a bonus issue in the ratio of two shares of Rs 10 each for every five shares held. This will increase the capital to Rs 76.26 crore from the existing Rs 54.45 crore.

After the bonus issue, the bank will come out with a rights issue offering shareholders two shares for every five shares held. The price per right share will be Rs 150 (Rs 140 premium for the Rs 10 paid-up share). The bank will issue 3.05-crore rights shares at a price of Rs 150 to raise Rs 457.54 crore.

Following the rights issue, the bank will be able to raise its net worth to a comfortable level of more than Rs 2,000 crore from the current Rs 1,620 crore, KVB officials told ET. It is raising the money to maintain the capital adequacy ratio (now 14.49%) in tune with the credit expansion taking place now.

They said after a long time, the bank has decided to raise the cap on the aggregate foreign investment from all sources to 35% from 24%.

It is required to raise the limit as it has almost touched the 24% cap and other private sector banks have hiked it as per government policy.

Angel Broking vice-president research — banking, Vaibhav Agrawal, says: “Generally, smaller banks like Karur Vysya rely more on equity for their capital adequacy requirements as Tier-1 and Tier-2 bonds are not available to them at attractive rates. Considering that the bank’s capital adequacy was relatively low at 12.5%, the rights issue makes sense to fund future growth.”