Deleveraging RIL

Ambani has done well to reduce indebtedness

R eliance Industries Ltd (RIL) has been in the spotlight in recent times due to its steadily rising indebtedness. Its multi-billion-dollar investment in mobile telephony is yet to deliver adequate incremental revenues and profits to justify the amount of investment in the venture. This has resulted in a sharp increase in the company’s leverage ratio while its free cash flows have remained negative for the past few years, given that debt has gone up dramatically to $65 billion in FY19 from $19 billion in FY15 due to  higher crude oil payables and financing of  JioPhone and the East West Pipeline.