R-Infra will participate in bullet train project, says Anil Ambani
What's the story
At Reliance Infrastructure's 88th AGM, Reliance Group chairman Anil Ambani said that R-Infra's arm Reliance Naval and Engineering will soon come out with a rights issue. The firm is focusing more towards the defense vertical now, expecting rapid growth and demand. Moreover, R-Infra has partnered up with Japanese firms via JVs to participate in India's Rs. 1 lakh crore bullet train project. Here's more.
Defense
Defense is a priority now
Anil Ambani said that the Reliance Group is invested in the defense sector despite stiff competition. India currently imports 90% of its defense requirements, therefore, there is a lot of scope. He mentioned, "Our defense vertical Reliance Naval & Engineering will soon come out with a rights issue which will help promoters to increase stake in the company by 5 percentage points to 36%."
Ambani
Best suited to address demands
Reiterating R-Infra's urge to make headway in the defense sector, Ambani said that with the acquisition of the Pipavav Shipyard, his firm has become one of the two firms that are strategically positioned to participate in building Indian submarines. It is now eyeing Centre's Rs. 50,000 crore contract for building six submarines in order to become India's first submarine building private sector firm.
RNEL
Learning from the best
Ambani mentioned that Reliance Naval & Engineering (RNEL) will also engage with world leaders to gain a better insight into the defense business. Also, RNEL has entered into a JV with Daher, which supplies composite material to Boeing and Airbus. "Daher will be moving all their facilities to India and India will be an exporter to Boeing and Airbus," Ambani said.
JV
Joint ventures with Japanese firms
R-Infra will also work alongside the Japanese to build India's first bullet train. Ambani said, "We are deeply engaged and involved with a number of Japanese companies through joint ventures and we will participate in this very ambitious Rs 1 lakh crore bullet train project." R-Infra is also committed to being an Engineering, Procurement, and Construction (EPC) leader, he added.
Train
Mumbai-Ahmedabad bullet train project
The Mumbai-Ahmedabad bullet train will have an average speed of 320kmph and a maximum speed of 350kmph. Apart from the underground tunnel, 468km will be elevated and 13km will be on ground. There will be 12 stations: Bandra Kurla Complex, Boisar, Thane, Bilimora, Virar, Bharuch, Vapi, Surat, Ahmedabad, Vadodara, Anand and Sabarmati. Though fares haven't been decided yet, a Mumbai-Ahmedabad journey could cost Rs. 2,700-3,000.
Japan
Japan to provide loans to meet 80% of project cost
The project is estimated to cost Rs. 1.1L crore; Japan will provide a soft loan of Rs. 88,000cr at 0.1% interest, to be repaid in 50 years with a 15-year moratorium. It has one condition: India would buy 30% of the equipment, including coaches and locomotives from Japanese firms. The cabinet had earlier said the remaining 70-80% components could be manufactured in India.
InvIT
InvIT gets delayed again
Meanwhile, R-Infra CEO informed that Reliance Infrastructure's (RInfra) Investment Trust (InvIT) has been delayed again. It will now come out during the quarter ending in December. This InvIT fund will now have seven road projects and the total fund will be worth Rs. 2,500 crore, which is a sharp fall from its initial announcement of Rs. 5,000 crore fund and ten road projects portfolio.