Anil Ambani ringfenced two debt-free companies and pivoted into defence and green energy

What was changed

For a decade Anil Ambani was a case study in decline: Reliance Communications, worth over Rs 1.68 lakh crore in January 2008, shut its wireless operations in 2017 under more than Rs 45,000 crore of debt and filed for insolvency in 2019; Reliance Capital defaulted and went under RBI-led resolution in 2021. Almost everyone in the market had written him off.

The rebuild began in 2024, as the rebranded Reliance Group India quietly moved to ringfence the two operating companies, Reliance Infrastructure and Reliance Power, from legacy telecom and financial liabilities. By October 2024 both declared themselves debt-free. The group describes its roadmap as 'asset-light, capital-efficient models designed to deliver superior returns on invested capital', with the next generation — Jai Anmol and Jai Anshul Ambani — involved in debt-reduction initiatives and new defence and renewable deals.

The pivot aimed at sectors India is actively betting on: defence production and green energy. Reliance Defence is targeting a Rs 50,000-crore export-addressable market, aiming at Rs 3,000 crore of exports over two years; Reliance Power is building a 2.5 GWp solar pipeline plus over 2.5 GWh of battery storage, while Reliance Infrastructure enters solar module and renewable hardware manufacturing. Funding the reset: Rs 4,500 crore of preferential allotments, Rs 7,100 crore of FCCBs with Värde Partners, a Rs 6,000-crore QIP in preparation, and nine toll-road assets to be monetised.

By July 2025 the scoreboard read: Reliance Power market cap up ~1.65x in six months to ~Rs 28,537 crore with FII stake up from ~7% (FY23) to ~13% (FY25); Reliance Infrastructure up 1.36x to Rs 16,360 crore with FII stake at 11%; debt-to-equity down to 0.28x (RInfra) and 0.93 (RPower); net worth up sharply at both. Anand Rathi Investment Banking director Vipin Singhal credited 'strategic sectoral focus, debt reduction and legal relief' — the latter a June 2025 NCLAT stay of insolvency proceedings against Reliance Infra.

Why it worked

The legacy companies' insolvencies had cut the group off from capital; ringfencing the operating companies was the precondition for any fundraising.

Defence and renewables are where Indian policy — 'Atmanirbhar Bharat', the 500 GW non-fossil target for 2030 — is directing capital, so the pivot aligns the group with state priorities.

Asset-light, capital-efficient models were chosen explicitly to deliver higher ROIC after a decade of debt-fuelled capital intensity.

A diversified capital stack (preferential allotments, FCCBs with Värde Partners, QIPs, asset monetisation) spreads refinancing risk while the pivot executes.

A legal reprieve — NCLAT staying insolvency proceedings against Reliance Infra in June 2025 — gave the market sentiment room to re-rate the stocks.

What can be applied

A collapsed group can restart by ringfencing operating companies from legacy liabilities, then betting on sectors the state itself is funding — but execution, not announcement, decides endurance.

Aftermath

The Economic Times framed the comeback as promising but unproven: execution timelines and regulatory bottlenecks are the watch items, RCom's insolvency remains under Supreme Court review over AGR liabilities, and Reliance Capital's handover to the Hinduja-winning bidder is still delayed by disputes. Singhal's verdict: the improved financials are real, but the medium term 'hinges on successful execution of defence and renewable projects, continued debt reduction, and transparent governance'.