IFSC GIFT City to get First Conglomerate Ship Leasing Firm by Reliance Industries

After Adani’s and Air India’s aircraft leasing unit at IFSC GIFT City, Reliance Industries Limited (RIL) has braced itself to pave their way into GIFT City by launching the smart city’s first conglomerate ship leasing firm. For this strategic move, RIL is estimated to incur a total investment and expense of ₹22,033 crores. Also Read - Adani to launch new aircraft leasing unit at GIFT City

RIL has proposed their offer, subject to the SEZ committee's approval. The need for the leasing unit has been mentioned for approvals to set up a ship leasing firm that borne business of operating leases of ships, vyoages chaters, and vessels. The establishment of the ship leasing firm at the GIFT City has been handled by the CEO and President of Jio Financial Services, Hitesh Kumar Sethia, the SVP and Head Gases at the conglomerate, Amit Mehta, who has also been with RIL from the past 2 decades; and the AGM in RIL, Jayesh Biharilal Dholakia.

Financial Aspects

Talking about the financial sources of the multi-billion-dollar project, Reliance has reportedly balanced the investors and promoters capital from the financial liabilities and internal accruals. According to the information acquired from the sources, the investors and promoters will invest ₹5 crore in capital from financial liabilities, ₹11,607 crore and balance  ₹13.26 crore from internal accruals.

A source came forward an conveyed, “Reliance has approached the International Financial Serices Centres Authority (IFSCA) for approval to launch a ship leasing firm to carry on the business of operating leases of ships, voyage carts, and vessels.”

Besides this, on the financial aspect, the reviewed information shows that, “Free on Board (FOB) value for the export of services for a five-year-period is projected at ₹10,780.41 crore, which is ₹2,156 crore per annum. The foreign exchange outgo is ₹10,397 crore, resulting in a Net Foreign Exchange (NFE) of ₹383 crore.”

Dipesh Shah, the Executive Director (Development) of IFSCA added to this, “IFSC Authority has received application from Reliance International Leasing IFSC Ltd. We are seeing great interest from institutions to set up ship leasing business from GIFT IFSC. Currently, at IFSC, we have authorized seven entities and three in-principle approvals. Already three ships have been leased into India from IFSC.”

Ship Leasing at GIFT City

Indian maritime is at its peak, and the launch of RIL’s ship leasing firm at Gujarat’s IFSC centre, GIFT City will surely attract more business towards country benefiting the import and export sector of the country. As we stated above, after aircraft leasing units, ship leasing unit is a perfect addition to the vast range of activities carried out in GIFT City.

Technically, RIL’s ship leasing was not the first ship leasing firm to be setup in GIFT City. In fact, Ripley Shipping India IFSC Private Ltd. was the first company to lease a vessel from the GIFT City. The company received a certificate of registration from IFSCA in March 2023 to operate in GIFT City. MV Ripley Pride is a bulk carrier (Panamax) that was built in 2003 in Japan with a carrying capacity of about 76,858 deadweight tonne (DWT).

Why GIFT City?

Choosing GIFT City as the base for this pioneering venture is a testament to the foresight of Reliance Industries. GIFT City, India's first operational smart city and international financial services centre, provides a conducive ecosystem for financial services firms with its robust infrastructure, favorable regulatory environment, and strategic location. This move is set to leverage GIFT City's unique offerings, further cementing its position on the global financial stage.

Implications for India's Economic Ambitions

This development is aligned with India's broader economic ambitions of enhancing its maritime capabilities and strengthening its position in the global financial services industry. By attracting significant investments and fostering innovation, the establishment of the ship leasing firm is expected to generate substantial employment opportunities, bolster the maritime sector, and contribute to the overall economic growth.

A Win-Win for Stakeholders

The implications of this venture extend far beyond the immediate stakeholders. For Reliance Industries, it represents a diversification into a new domain with vast potential. For GIFT City, it underscores its attractiveness and viability as an international financial hub. And for the maritime industry at large, it heralds a new era of financial flexibility and growth opportunities.

Looking Ahead

The establishment of the first conglomerate ship leasing firm by Reliance Industries in IFSC GIFT City is a bold step into uncharted waters. It is a reflection of India's growing influence in global financial and maritime domains and a beacon of innovation and growth. As this venture unfolds, it is poised to set new benchmarks, drive economic growth, and open new horizons for the maritime industry.

In conclusion, Reliance Industries' strategic decision to anchor its ship leasing firm in GIFT City is more than an investment; it's a visionary move that promises to redefine the contours of the maritime and financial sectors. It is a testament to the potential of GIFT City as a global financial hub and a signal of India's rising prominence on the world stage. This is the right time to invest in GIFT City. Are you worried about finding the right property in GIFT City? Don’t you worry, contact RES Management, and get the perfect investment property in Gujarat’s prime area GIFT City.