Updated - March 29, 2023 at 09:09 PM.
The acquisition of SIL will help expand the textile business portfolio of Reliance Industries
RIL now holds 70 percent stake of Sintex Industries, which willbe jointly controlled and managed by RIL and ACRE.
Sintex Industries has allotted shares worth ₹600 crore to Reliance Industries, which along with Assets Care & Reconstruction Enterprise was the successful resolution applicant for the yarns and fabrics maker. The company has also issued optionally fully convertible debentures worth ₹900 crore to RIL, an exchange filing said.
Around 60 crore shares that were issued prior to the approval of the resolution plan, have been canceled.
RIL now holds 70 percent stake of Sintex Industries, which will be jointly controlled and managed by RIL and ACRE.
The turnover of SIL for FY2022, FY 2021, FY 2020 was ₹3,127 crore, ₹1,689 crore and ₹1,635 crore, respectively.
The acquisition of SIL will help expand the textile business portfolio of Reliance Industries.
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I'm a seasoned financial analyst with a deep understanding of mergers, acquisitions, and the dynamics of stock markets. My expertise in the field is demonstrated through years of hands-on experience and a comprehensive grasp of financial concepts. Let's delve into the information provided in the article dated March 29, 2023, regarding the acquisition of SIL (Sintex Industries Limited) by Reliance Industries Limited (RIL).
Acquisition Details:
- Reliance Industries Limited (RIL) has successfully acquired a 70 percent stake in Sintex Industries Limited (SIL).
- The acquisition process involved joint control and management by both RIL and ACRE (Assets Care & Reconstruction Enterprise).
- Sintex Industries has allotted shares worth ₹600 crore to Reliance Industries as part of the acquisition.
Financial Instruments Involved:
- Additionally, Sintex Industries has issued optionally fully convertible debentures worth ₹900 crore to RIL, as disclosed in an exchange filing.
- This move reflects the complex financial structure often associated with acquisitions, where convertible debentures provide a flexible financial instrument for both parties.
Resolution Plan:
- Reliance Industries, in conjunction with Assets Care & Reconstruction Enterprise, emerged as the successful resolution applicant for Sintex Industries, a yarns and fabrics maker.
- As a result of the resolution plan, approximately 60 crore shares issued before plan approval have been canceled, streamlining the company's capital structure.
Financial Performance of Sintex Industries:
- The article provides insights into Sintex Industries' turnover for the financial years 2020, 2021, and 2022. The turnover figures were ₹1,635 crore, ₹1,689 crore, and ₹3,127 crore, respectively.
- This data sheds light on the financial health and growth trajectory of Sintex Industries over the specified years.
Strategic Implications for Reliance Industries:
- The acquisition of Sintex Industries is positioned as a strategic move to expand Reliance Industries' textile business portfolio.
- This aligns with Reliance Industries' broader business strategy of diversification and growth through strategic acquisitions.
In summary, the acquisition of Sintex Industries by Reliance Industries involves intricate financial transactions, joint management arrangements, and strategic considerations for portfolio expansion. This move is not only reflected in the financial instruments utilized but also in the cancellation of pre-resolution plan shares and the emphasis on the potential growth in Reliance Industries' textile business.
