Reliance Infrastructure Limited is a prominent player in India’s power and construction sectors. The company has a rich history and ambitious plans but now must navigate financial losses and operational disputes. Recent efforts to reduce debt and resolve disputes have shown promise, yet the future remains uncertain. The question arises: What is the road ahead of Reliance Infrastructure Limited? In this article, we unravel the company’s segments, future plans, and financial analysis. Let’s begin!
Industry Overview
India’s infrastructure sector is experiencing rapid growth, driven by significant government investments and initiatives. The National Infrastructure Pipeline aims for $1.4 trillion in investments by 2025, enhancing roads, airports, and power generation. The government plans to develop 2 lakh kilometers of national highways and expand airport capacity to 220.
India is the third-largest producer and consumer of electricity worldwide, and installed power capacity reached 442.85 GW, with renewable energy contributing 42.3%. The defence sector also thrives, with a budget of $74.7 billion ranked fourth highest globally in 2024 and a target of $2.41 billion in exports for FY24. These initiatives, coupled with public-private partnerships, are driving India’s ambitious goal of becoming a US $5 trillion economy by 2025.
Company Overview Of Reliance Infrastructure
Reliance Infrastructure was established on October 1, 1929. The company is headquartered in DAKC, Navi Mumbai, India. It is part of the Reliance Anil Dhirubhai Ambani Group. Reliance Infrastructure Limited (RIL) is a prominent utility company. It has specialized in generating, transmitting, and distributing electricity. Reliance Infrastructure Limited serves a diverse clientele, including residential, industrial, and commercial consumers.
Note: If you want to learn Candlesticks and Chart Trading from Scratch, here’s the best book available on Amazon! Get the book now!
Reliance Infrastructure Limited engages in engineering and construction services across various sectors, such as roads, metro rail systems, and airports. It is also interested in the fields of power plants, toll roads, and bridges. The company has completed significant projects like Mumbai’s first metro line. Reliance Infrastructure Limited also works on defense projects through special-purpose vehicles (SPVs), enhancing India’s infrastructure landscape.
Segment Analysis of Reliance Infrastructure
Power Distribution
The Power segment generates, transmits, and distributes electrical power at various locations. Three combined cycle power plants under its operation are located in Samalkot (220 MW), Mormugao (48 MW), and Chitradurga (9.39 MW) wind farms.
The company has managed BSES Rajdhani Power Limited and BSES Yamuna Power Limited, serving over 49 lakh customers in Delhi. In this segment, the company generated a combined income of ₹19602.78 crore in FY24.
Road Business
The company operates eight toll road projects across four Indian states, spanning 644.26 km. These projects cater to over 3.09 lakh vehicles per day, generating toll revenue of ₹3.15 crore daily. Key projects include the Delhi-Agra and Pune-Satara highways, crucial for connecting high-traffic areas. In this segment, the company generated a revenue of ₹1151.03 crore in FY24.
Metro Business
Reliance Infrastructure Limited operates Mumbai Metro One, which has transported over 978 million passengers. The metro integrates with other transportation systems, improving connectivity. It has also been installed on solar rooftops in 12 metro stations and is generating a capacity of 2.30 MW of energy. In this segment, the company generated a revenue of ₹186.66 crore in FY24.
Airport Business
Reliance Infrastructure Limited operates five brownfield airports in Maharashtra, including Nanded, which handles scheduled flights, and four others that operate non-scheduled flights. In this segment, the company generated a revenue of ₹309.56 crore in FY24.
Engineering and Construction Business
Engineering and Construction Division is a leading service provider of integrated design, engineering, procurement, and project management services for undertaking turnkey contracts. It includes coal-based thermal projects, gas-power projects, nuclear power projects, metro, rail, and road projects. In this segment, the company generated a revenue of ₹462.27 crore in FY24.
Defence Business
Reliance Infrastructure Limited is involved in the aerospace and defence sector under Reliance Defence through joint ventures like Dassault Reliance Aerospace Limited. They manufacture aircraft components for both civil and military purposes.
Other businesses of Reliance Infrastructure Limited have generated a revenue of ₹354.55 crore in FY24.
Reliance Infrastructure settlement with Edelweiss
Reliance Infrastructure has successfully settled its dues with Edelweiss Asset Reconstruction Company. The company made a payment of ₹235 crore to clear its obligations related to non-convertible debentures (NCDs), which were initially valued at ₹385 crore, resulting in a haircut for Edelweiss of approximately 39%. This settlement is part of Reliance Infrastructure’s broader strategy to reduce its external debt significantly.
In addition, Reliance Infrastructure also reached a separate settlement with the Life Insurance Corporation of India (LIC), paying ₹600 crore to resolve outstanding dues. Following these settlements, the company’s external debt has been reduced from ₹3,831 crore to just ₹475 crore, with a net worth now standing at approximately ₹9,041 crore.
This positive development is expected to enhance the company’s financial stability and improve investor sentiment. Therefore, Reliance Infrastructure Limited’s stock has surged almost 39% in the stock market. It has reached from ₹218 to ₹304 in 3 days, which is from September 17 to September 19, 2024.
Financial Analysis Of Reliance Infrastructure
Coming into the financial parts of Reliance Infrastructure Limited, the company’s revenue has increased over the last four years. The revenue of the company has increased from ₹20,646 crore in FY23 to ₹22,066 crore in FY24, which has grown by 6.88%.
The company has incurred most of its revenue from the power business by 88.83%, the engineering and construction business by 2.09%, the infrastructure business by 7.46%, and other businesses by 1.61% in FY24. Reliance Infrastructure Limited’s revenue has grown at a CAGR of 9.72% over the last three years.
In FY22, Reliance Infrastructure Limited’s net profit flipped into a net loss because they incurred less regulatory income as compared to ₹2441.23 crore received in FY21. In FY23, the company’s net loss was the highest in the last four years because of the exceptional items of -2392.66 crore. Furthermore, Reliance Infrastructure Limited’s net loss has decreased from ₹2,473.04 crore in FY23 to ₹645.56 crore in FY24.
Reliance Infrastructure Limited’s operating profit margin has decreased till 2023. In the financial year 2024, the OPM has increased from 6.50% to 14.25%. The company NPM has improved from -11.69% in FY23 to -2.87% in FY24. Reliance Infrastructure Limited’s ROE and ROCE have improved as compared to FY23, which is to be -18.39% and 4.30%, respectively, in FY24.
Reliance Infrastructure Limited’s borrowing has continuously decreased since 2016. As compared to the previous year, it has decreased from ₹11,510 crore in FY23 to ₹9,895 crore in FY24. It is reflected in the debt-to-equity ratio of Reliance Infrastructure Limited. The company has improved debt to equity from 1.23x in FY23 to 1.11x in FY24.
Shareholding Pattern of Reliance Infrastructure
In the shareholding of Reliance Infrastructure Limited, the company’s FII holding has increased from 11.77% to 12.37% in the June quarter of 2025. The DII holdings also increased from 2.16% in Q4 FY24 to 2.26% in Q1 FY25.
Additionally, the public holdings have decreased from 69.42% to 68.75% in Q1 FY25. Increasing the FII and DII and decreasing public holding create confidence in the company’s growth prospects, positive sentiment toward the sector, and increased liquidity.
Vijay Kedia holds a 1.01% stake in Reliance Infrastructure Limited, equivalent to 4,000,000 shares. His total investment in the company amounts to ₹114 crore in the June quarter of the financial year 2025.
Also read…
Future Plans of Reliance Infrastructure
- Reliance Infrastructure aims to enhance Mumbai’s public transport through its Mumbai Metro One (MMOPL) business by integrating with new metro lines like Line 2A and 7.
- Reliance’s defence business plans to expand through joint ventures such as Dassault Reliance Aerospace Limited (DRAL). It is expanding to build final assemblies for Falcon 2000 jets and sub-assemblies for Rafale fighter jets at MIHAN SEZ.
- Reliance is enhancing its metro business by pursuing non-fare revenue streams through station branding and advertising partnerships with brands like McDonald’s and Starbucks.
- Reliance Infrastructure plans to expand its toll roads business by integrating GNSS-based toll systems, aiming to reduce operational costs amid rising vehicle sales and infrastructure development in India.
- Reliance Infrastructure is modernizing its power distribution network to enhance energy efficiency and reliability while integrating renewable energy sources.
- Reliance Infrastructure has launched new subsidiaries focused on electric vehicle manufacturing and power generation to capitalize on India’s growing demand for sustainable transportation solutions.
- Reliance Infrastructure Limited has reduced its external debts from Rs 3831 crore to Rs 475 crore. This will help to improve financial management and operational efficiency.
Key Financial Metrics Of Reliance Infrastructure
Some of the key financial metrics of Reliance Infrastructure Limited are given below.
Conclusion
In conclusion, Reliance Infrastructure Limited is navigating a complex landscape with increased revenue and reduced debt. Despite these improvements, the company continues to face net losses. The rise in foreign and domestic institutional investor holdings reflects growing confidence in its future.
Reliance Infrastructure’s expansion plans in the metro, defense, and power sectors offer growth potential. Improved debt management may lead to better financial health. Overall, Reliance Infrastructure’s strategic moves could pave the way for a more stable financial outlook.
What are your thoughts on Reliance Infrastructure’s strategy to reduce debt? What steps should Reliance Infrastructure take to achieve profitability? How do you think increased institutional investment will impact the company’s future? Let us know in the comments below.
Written By Nikhil Naik
By utilizing the stock screener, stock heatmap, portfolio backtesting, and stock compare tool on the Trade Brains portal, investors gain access to comprehensive tools that enable them to identify the best stocks, also get updated with stock market news, and make well-informed investments.
Start Your Stock Market Journey Today!
Want to learn Stock Market trading and Investing? Make sure to check out exclusive Stock Market courses by FinGrad, the learning initiative by Trade Brains. You can enroll in FREE courses and webinars available on FinGrad today and get ahead in your trading career. Join now!!
