Reliance Infrastructure Ltd has reportedly sold its cement business to Birla Corporation for Rs. 4,800 crore. The company led by Anil Ambani has allegedly made this move to expand their defense-based manufacturing business as well as to cut down the accumulated debts.

Anil Ambani's Reliance group has long been trying to sell some of its assets to settle down the debts which is reported to range somewhere between Rs 20,000 and 25,000 crore. The company announced its plans to sell their road as well as cement businesses back in November in order for expanding their defense ventures. It is to be noted that Reliance Communications Ltd has had a deal with a consortium led by TPG Capital Management to sell their mobile phone towers entering into a non-binding pact, reported Live Mint.

"We are targeting to bring down our debt in Reliance Infrastructure to nil by March 2017 through our sale processes," said acting chief executive officer of Reliance Infrastructure, Lalit Jalan. He also added that the company currently owes Rs.16,000 crore as debt.

The company also noted in their statement released on Thursday that Competition Commission of India and other regulatory authorities are yet to approve the transaction for the deal between the two India based giant firms to be through. Once is deal is done 100 percent of the business' shareholding authority will be acquired by Birla Corporation, noted Hindustan Times.

The acquisition of the Reliance Cement Company Pvt. Ltd. by Birla Corporation would give them the ownership of high quality assets of around 15.5 MTPA. The company has the expansion potential in many states in India including Andhra Pradesh, Rajasthan, Madhya Pradesh, Himachal Pradesh, Maharashtra and Karnataka, according to Business Standards.

"It is a good quality asset and complements Birla Corp.'s existing business and allows them to enter newer regions," said Ashutosh Maheshwari, managing director and chief executive officer at Motilal Oswal Investment Advisors Pvt. Ltd.

"Also, the Reliance cement capacity came on stream in the last two years, which means it is a new asset and they have done enough ground work where Birla Corp. can double its capacity very quickly," noted Maheshwari.

According to Murtuza Arsiwala of Kotak Institutional Equities, though the deal looks expensive, it is the optimal price at which the deal can happen as per the present day market scenario. He also added that the price would increase drastically with the revival of economy which he predicts would occur in a years-time.