Reliance Cap Raises Borrowing Limit To Rs 5,000 Crore

Reliance Capital Ltd (RCL) is raising its borrowing limit to Rs 5,000 crore from an amount equal to its equity capital and free reserves to fund proposed investments in infrastructure projects.

RCL is planning to make significant investments in capital-intensive infrastructure projects in the areas of power, telecom, roads and ports. Accordingly, the companys board of directors is moving a special resolution, seeking authorisation from shareholders to increase its borrowing limit to Rs 5,000 crore at the annual general meeting scheduled for Septem-ber 15, 1997.

The RCL board is authorised to borrow any sum at its discretion for the purpose of the companys business. However, since the borrowing plan of Rs 5,000 crore exceeds the companys networth (paid-up capital plus free reser-ves) the board is seeking the shareholders approval.

RCLs networth in 1996-97 was Rs 1,049.85 crore. The companys paid-up capital amounted to Rs 123.95 crore, while reserves and surplus amounted to Rs 925.90 crore. Investments were up to Rs 295.50 crore from Rs 282.91 crore.

Investment in US-64 dropped to Rs 19 lakh during 1996-97 from Rs 17.49 crore in the previous year, while investments in other UTI schemes rose modestly to Rs 3.58 crore from Rs 2.27 crore.

Meanwhile, the crash in real estate prices has been reflected in the balance sheet of Reliance Land Ltd (RLL), a subsidiary of Reliance Capital.

On a net worth of Rs 10.13 crore for 1996-97, RLL reported lower profits, both before and after tax. Profit before tax dropped to Rs 10.35 lakh in 1996-97 from Rs 38.56 lakh in 1996-97, while PAT dipped to Rs 3.14 lakh in 1996-97 from Rs 15 lakh.