SIMPLY PUT: Here’s why Mukesh Ambani is borrowing money again

The pandemic hit us in early 2020 and when the world had come to a standstill, Asia’s richest man Mukesh Ambani and his team were busy closing some of the biggest deals India had ever seen.

Conventional wisdom would tell us that selling stake during a crisis is a bad idea because the buyers would be wary and not willing to pay a high price. But Reliance Industries raised over $22 billion from strategic investors like Facebook (now, called Meta) and Google, during the pandemic to bring down the debt to zero.

But now that everyone is crawling back to business, Ambani has gone against the tide and decided to borrow $5 billion from the market again. What’s he really up to?


There are two reasons why he is in the market borrowing money again. One, to bring down the annual interest payments with cheaper loans. An initial estimate said that the interest on the new loans will be 57% less than the earlier ones.

The idea is to use the money from the new loans to repay the old ones, which carry a higher interest rate.

The second reason for the new loans is to fund a series of ambitious projects in what he calls ‘new energy’. Reliance Industries has already revealed a ₹75,000 crore investment plan.

Ambani knows that the focus of the next decade ⁠— at the level of governments, corporations as well as consumers ⁠— will be to reduce carbon emissions and to invest in renewable energy, electric vehicles, and hydrogen fuel.

This kind of societal shift can be a huge money making opportunity and the ace businessman is prepping for it.


Basically, Ambani, who sold oil and petrochemicals for decades, has decided to go green. But, unlike the Incredible Hulk, anger isn’t the trigger for this giant of India Inc. It’s money and opportunity.


And he’s not going to build electric vehicles (EVs) or start an electricity distribution company. Instead, he will make the panels, batteries and fuel cells that others will buy, assemble and sell thereafter. A lot like what Elon Musk’s Tesla plans to do.

Instead of releasing the hydrogen produced from the factories into the air, a fuel cell can combine the hydrogen with the oxygen in the air to generate electricity.

And because ‘going green’ is a global fad ⁠— one that’s just gonna get more popular for a long time before it becomes passe ⁠— people are willing to lend money at a cheaper price.


We all wanna make money, from our investments and from having jobs that pay good salaries. But most people figure out the best money making ideas a little too late.

In the early 2000s, if you had figured out that e-commerce was gonna be a thing in the next 10 years, even if you couldn’t invest in Flipkart then, you could have just taken a job there with some ESOPs, and you would probably be a millionaire now.

If someone told you before the pandemic that a communication technology firm like Zoom is gonna be an integral part of everyone’s lives, imagine the money you could have made with just a few shares.

Unlike most of us, the rich people are always on to these trends early, very early. So, let’s see what Ambani is planning and what we can learn from it.

Here’s a short video.