SWOT Analysis
Reliance Infrastructure Company India- A Strategic Management Case Study
Strategic Management Case Study on
Reliance Infrastructure Company India-SWOT Analysis Report
Strengths
■ The company's
portfolio includes some of India's flagship infrastructure projects, such as
the Mumbai and New Delhi metros and the Tilaiya UMPP.
§ Fitch Ratings
India has awarded an 'Ind AAA' debt rating for the company.
Weaknesses
■ Reliance's heavy
involvement with the PPP market potentially exposes the company to demand risks
associated with external economic shocks.
Opportunities
■ Strong
population growth and a growing economy is fuelling demand for infrastructure.
■ India's
government is looking to improve the regulatory regime to make the business environment
more attractive for private sector companies looking to invest in infrastructure.
It is also opening up the sector to private companies through public private partnerships
(PPPs).
Threats
■ Lack of widely
available domestic expertise to take on large infrastructure and civil engineering
projects.
Reliance Infrastructure
Ltd (R-Infra), a part of the Anil
Ambani-led Reliance Group,
plans to sell either all or most of its 11 road projects to pare debt,
according to three people familiar with the development, joining companies that
are putting assets on sale to reduce their debt burden.
R-Infra has appointed
consulting firm EY, formerly known as Ernst and Young, to oversee the sale,
said the people, who didn’t want to be identified. The aim is to reduce some of
the Rs.21,976.18 crore of debt it had on its books at the end of the last
fiscal year.
R-Infra’s spokesperson
declined to comment on the matter. An e-mail sent to EY on Friday did not
elicit a response.
Two of the three people
said EY is taking the projects, with a total length of 968km and on which
R-Infra has spent around Rs.11,700 crore, to potential buyers and is yet to
finalize their sale.
One of the three people
is from R-Infra, another an investment banker and the third is with a private
equity fund.
The plan comes at a time
when nearly 50 roads projects are up for sale in the country as infrastructure
companies building them struggle with problems including delayed government
approvals, land acquisition hassles and a funding crunch in the face of high
borrowing costs.
