Reliance Industries to consider fundraising proposal on Thursday

Reliance Industries (RIL) on Monday said a board meeting has been scheduled to consider fundraising by issuing listed, secured/unsecured and redeemable non-convertible debentures on a private placement basis in one or more tranches.

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The fundraising proposal is to be considered at board meeting on Thursday.

Reliance Industries' board to meet on April 2 for fundraising through NCDs

Reliance Industries Limited (RIL) will hold a board meeting on April 2 in a fund raising exercise through issuance of non-convertible debentures (NCDs) on private placement basis.

RIL said in an intimation to stock exchange that a meeting of the board of directors is scheduled to be held on April 2 to consider raising of funds by way of issuance of listed, secured/unsecured, redeemable non-convertible debentures on private placement basis on one or more tranches/series.

The quantum of funds to be raised or the purpose of fund raising has not been disclosed in the intimation. RIL regularly raises funds through NCDs on a private placement basis to institutional investors.

RIL tumbles nearly 13% to Rs 1,113.15 on weak petroleum demand outlook

Mukesh Ambani-promoted Reliance Industries (RIL) on Monday fell close to 13 per cent at the stock exchanges, on anticipated weak petroleum demand.

In Monday’s trade, RIL closed at Rs 1,113.15 per share, 12.35 per cent down from its previous close on the Bombay Stock Exchange. At play, was the fall in crude oil prices and an expectation of lower demand for the petrochemicals business.

“What is playing out is a weaker demand for petroleum, in general, impacting RIL's stock prices. The petchem segment has around 1-1.5x times linkage to economic growth. A weaker demand environment, stemming from weaker economic growth, amid capacity addition, especially in the US, is adding to headwinds. Weaker crude is in a way positive to the extent that weakness pertains to oversupply in the crude oil market, and could be supportive for margins, however, any demand-related weakness is likely to weigh on margins,” said Nitin Tiwari, vice-president at Antique Stock Broking.

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RIL’s petrochemicals business contributes roughly 31 per cent to RIL’s consolidated earnings before interest, taxation, depreciation and amortisation or Ebitda.

"The current problem is definitely the sharp fall in crude oil prices and the resultant impact on the supply side of petroleum products. There may be uncertainty in the off-take of petroleum products for some time, which may impact RIL for a short period,” said Deven Choksey, managing director of KRChoksey Investment Managers.

Overall, refiners, like Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation, stand to gain from the weak crude oil prices. RIL’s refining business stands to benefit similarly.

“We expect downstream oil companies to benefit from lower crude oil prices from improvement in marketing margins, reduction in fuel and loss, increase in crude discounts from the West Asian region and lower working capital. Resulting gains will allow these companies to offset one-time losses on inventory as well as sustained weakness in underlying refining margins,” analysts Tarun Lakhotia and Hemang Khanna, wrote in a Kotak Securities report. The refining benefit, certain others add, will also hinge on sustaining the low crude oil prices."

An analyst at a domestic brokerage firm, who did not wish to be identified, added, “Monday’s fall in prices for RIL was due to the global sell-off. However, if crude remains at current level, the broad expectation is demand for petrochemicals will be low,” he said.

RIL’s exports are also expected to take a hit. In the December 2019 quarter, exports from the company’s India operations took a hit of 13.7 per cent, lower at Rs 53,804 crore.

Monday’s hit comes after RIL’s stocks have been under pressure for the last few weeks. “RIL is down to levels reached last year when it stated its plan to lower debt; concern about energy cash-flow is rising. The stock is pricing in cash cost industry margins on energy, and limited upside from de-gearing despite reduced capital intensity, higher Average revenue per user (ARPU)s, and improved return on capital employed (ROCE),” said analysts with Morgan Stanley in a report released on March 8, before the Monday trade.

Six of top 10 firms lose Rs 95,432 crore in m-cap; RIL takes biggest hit

Six of the 10 most valued domestic companies suffered a combined erosion of Rs 95,432.26 crore in market valuation last week, dragged down by Reliance Industries Limited (RIL) and HDFC Bank amid a bearish trend in the broader market.

During the last week, the BSE Sensex plunged 720.67 points or 1.88 per cent. On Friday, the Sensex plummeted 894 points amid the Yes Bank crisis and coronavirus outbreak which has stoked fears of a global recession. The market capitalisation (m-cap) of RIL plummeted Rs 37,144 crore to Rs 8,05,118.67 crore, taking the biggest hit among the top-10 firms for the week ended Friday.

HDFC Bank's valuation dropped Rs 23,435 crore to Rs 6,22,109.94 crore and that of Bajaj Finance tumbled Rs 14,229.1 crore to Rs 2,54,309.90 crore. The market cap of HDFC tanked Rs 11,625.3 crore to Rs 3,65,214.59 crore and that of ICICI Bank fell Rs 6,325.67 crore to reach Rs 3,14,705.23 crore.

Bharti Airtel also suffered an erosion of Rs 2,673.22 crore from its m-cap to stand at Rs 2,83,225.26 crore.

In contrast, Tata Consultancy Services (TCS) made the maximum gain as its m-cap climbed Rs 43,884.14 crore to Rs 7,94,717.56 crore.

Infosys added Rs 3,364.34 crore to its valuation to reach Rs 3,14,821.60 crore. The m-cap of Hindustan Unilever Limited (HUL) rose by Rs 2,534.8 crore to Rs 4,73,359.77 crore.

Likewise, Kotak Mahindra Bank gained Rs 2,447.7 crore to Rs 3,12,168.86 crore. In the ranking of the 10 most valued firms, RIL retained its top spot, followed by TCS, HDFC Bank, HUL, HDFC, Infosys, ICICI Bank, Kotak Mahindra Bank, Airtel and Bajaj Finance.

RIL revenues decline 2.5% in Q3; Reliance Retail, Jio boost profit

Mukesh Ambani-controlled Reliance Industries’ (RIL’s) good performance in its new-age digital and retail businesses compared to the traditional oil and petrochemicals has started showing in its numbers with the group announcing a marginal 3.6 per cent year-on-year (YoY) increase in RIL’s profit before tax at Rs 14,962 crore for the December-ended quarter.

On the planned sale of 20 per cent in the oil-to-chemicals business to Saudi Aramco, officials refused to comment on the timeline for its definitive agreement. “It is not a deal that will get done by March. We cannot comment on the timelines of (definitive agreement),” said V Srikanth, joint chief financial officer, RIL.

The deal is valued at $15 billion and expected to help reduce the company’s debt.

The segment profit (earnings before interest and tax, or EBIT) for the group’s digital business increased by 63 per cent YoY to Rs 3,857 crore while that of Reliance Retail Venture went up by 58 per cent at Rs 2,389 crore. On the other hand, the petrochemicals segment, which contributes the most to profits, saw a 28.5 per cent decline in its EBIT to Rs 5,880 crore and refining EBIT grew 12 per cent to Rs 5,657 crore.

RIL’s net revenues, too, were disappointing as they fell 2.5 per cent YoY to Rs 1.53 trillion, while Reliance Jio’s revenues increased 28 per cent and Reliance Retail’s 27 per cent.

RIL’s net profit for October-December 2019 increased by 13.5 per cent to Rs 11,640 crore, beating street estimates.

In a Bloomberg poll, 10 analysts estimated revenues of Rs 1.45 trillion and net income of Rs 11,435 crore for the third quarter. The company said it had reported its highest ever consolidated net profit.

Ambani, chairman and managing director, RIL, said: “The third-quarter results for our energy business reflect the weak global economic environment and volatility in energy markets.”

“Within our O2C (oil to chemicals) chain, downstream petrochemicals profitability was impacted by weak margins across products with subdued demand in well-supplied markets. Refining segment performance improved in a difficult operating environment, given our continuous focus on cost positions, high operating rates and product placement,” he added.

The decrease in RIL’s revenues is primarily on account of a 10.6 per cent decline in the oil-to-chemicals business revenues, with a lower product price realisation and 6.6 per cent fall in Brent crude price. This was partially offset by a continuing growth momentum in consumer businesses, the company said in its statement.

chartIn the refining segment, RIL reported a gross refining margin (GRM) of $9.2 a barrel for the quarter. In the previous quarter, the GRM stood at $9.4 a barrel while in the year-ago quarter it was $8.8 per barrel. “The full impact (of International Maritime Organisation regulations) has not come in yet. We expect it will eventually show,” Srikanth added. He also added it would take 12-18 months for petrochemical prices to improve. Revenues for the petrochemicals segment fell 19 per cent to Rs 36,909 crore. The company also expects the full impact of the petcoke-gasifier project to reflect in the earning for full year FY21.

Though Jio lost 22.3 million subscribers during the quarter to end with 370 million of them, primarily because of “excessively heavy voice users, owing to implementation of IUC tariffs due to regulatory uncertainty”, the digital services business reported a 36 per cent increase in revenues to Rs 17,555 crore.

Jio also became a net recipient of access charges within two months of implementing inter-connect user charges (IUCs), while its average revenue per user (ARPU) stood at Rs 128.4 (including IUCs), up marginally from Rs 127.5 in the previous quarter.

Reliance Retail also posted robust YoY revenue growth of 27 per cent to Rs 45,327 crore.

The company’s debt was at Rs 3.06 trillion in Q3, against Rs 2.87 trillion in March 2019. Its net debt for the company as of December 2019 was at Rs 1.53 trillion. “Intensity of capital expenditure has been coming down quarter on quarter,” Srikanth said.

He added the company would look at refinancing debt as a natural course of business.

The board of directors of Reliance Jio Infocomm (Jio) approved a scheme of arrangement between certain classes of its creditors, including debenture holders, for transferring identified liabilities of about Rs 1.04 trillion for an equal consideration to the parent company. Jio has sought the National Company Law Tribunal’s approval for the transfer.

Exports (including deemed exports) from RIL’s India operations were lower by 13.7 per cent at Rs 53,804 crore ($7.5 billion) as against Rs 62,378 crore in the corresponding previous period due to lower price realisation from the petrochemicals and refining businesses. Higher sales volumes of petrochemicals business products in domestic market also contributed towards reduction in exports.

RIL may get new MD before April 1; Manoj Modi, Meswanis among probables

Reliance Industries Limited (RIL) could get a new Managing Director soon if the directive by the Securities and Exchange Board of India (SEBI) on separation of the Chairman and Managing Director posts is implemented as per schedule on April 1.

Mukesh Ambani, CMD of RIL will become the non-executive Chairman while a non-Ambani may become RIL's MD for the first time in the company's history.

While there is buzz around RIL Executive Director Nikhil Meswani's name, Mukesh Ambani's confidante and right hand man, Manoj Modi, who is virtually CEO of the company would be a natural choice.

The other two Executive Directors, Nikhil's younger brother, Hital and P.M.S. Prasad would also be on the probables list.

The Meswanis have been on the RIL board since mid to late 90s and are Mukesh Ambani's cousins. Their father, Rasiklal Meswani was one of the founder directors when Dhirubhai Ambani founded RIL.

Manoj Modi is not on the RIL board and does not hold a designated senior executive position but by all accounts has been one of the most important persons in RIL hierarchy.

A questionnaire sent to RIL by IANS did not receive any response.

SEBI has mandated to separate the roles of chairman and managing director/CEO of all listed entitled by April 1.

The directive excludes family members and relatives from taking up the MD position.

The meaning of relative as defined in Section 6 of the Companies act, 1956 defines the particular relationships: "A person shall be deemed to be a relative if and only if, they are members of the Hindu undivided family, they are husband and wife or the one is related to the other in the manner indicated in Schedule 1A.

"These include father, mother (including step mother), son (including step son), son's wife, daughter (including step daughter), father's father, father's mother, mother's mother, mother's father, son's son, son's son's wife, son's daughter, son's daughter's husband, daughter's husband, daughter's son, daughter's son's wife, daughter's daughter, daughter's daughter's husband, brother (including step brother), brother's wife, sister (including step sister) and sister's husband.

These are the categories counted as relatives under the Companies Act and while the definitions may look repetitive," they are precise.

In all of these definitions, cousins are not included, which implies that Nikhil and younger brother, Hital Meswani, also Executive Director and both of them having been longstanding members of the RIL board of directors are not precluded from becoming Managing Director.

Hital Meswani's name in the board of directors list appears only after Mukesh Ambani and his wife, Nita Ambani.

According to his bio data on the RIL website, Hital Meswani joined Reliance Industries Ltd. (RIL) in 1990 and is the son of Rasiklal Meswani, one of the Founder Directors of the company.

He is on the Board of RIL as Whole-time Director, designated as the Executive Director, RIL, since August 4, 1995. His overall responsibility spans the petroleum refining and marketing business, petrochemicals Manufacturing and several corporate functions of the company including human resources management, information technology, research & technology and capital projects execution.

He has been involved with almost all mega initiatives of the group through its growth journey. He was instrumental in execution of the world class petrochemicals complex at Hazira and the mammoth Reliance Jamnagar Refinery complex, the largest in the world at any single location.

He had also led a company-wide business transformation initiative, which has resulted in the development of the constitution of RIL - the Reliance Management System.

Nikhil Meswani joined Reliance in 1986, and since July 1, 1988, he has been a whole-time director, designated as Executive Director, on the Board of the company. He is primarily responsible for the petrochemicals division, and has made major contributions towards Reliance becoming a global leader in petrochemicals. Between 1997 and 2005, he handled the refinery business of the company.

In addition, he continues to shoulder several other corporate responsibilities, such as Corporate Affairs and Group Taxation. He is also involved in the affairs of Reliance-owned Indian Premier League cricket franchise Mumbai Indians and other sports initiatives of the company.

Manoj Modi is Mukesh Ambani's closest aide and friend over many years. He has been involved in key projects and is known to take over from Mukesh Ambani in meetings after Ambani has left. He has helped lead several new projects, from refining to retail to telecom, but carries no designated senior executive or board position and maintains a low profile. He is not on the board of RIL but has been on the board of Reliance Jio Infocomm.

As per a resolution for re-appointment as director, Manoj Modi, a Chemical Engineer from Institute of Chemical Technology, Mumbai, has played an invaluable role in the growth and evolution of the Reliance Group.

He has been associated with the Group for over three decades and has led several of the initiatives of the Group in this period of time. He has driven the overall corporate strategy for the Group and has been instrumental in formulation of strategy and policies, project planning & implementation and commercial, financial and regulatory matters.

Modi was part of the core team, along with Mukesh D. Ambani, which conceived and executed Reliance's petrochemical project at Hazira and refinery project at Jamnagar. Modi also drove the Group's first entry into the telecommunications business in 2002. He conceptualized and developed the strategy for setting up Reliance Infocomm (now Reliance Communications Limited), which was a transformational event for the telecom industry in India.

He is leading Reliance's implementation of a pan-India organized retail network spanning multiple formats and supply chain infrastructure. Reliance Retail is the largest retail player in the country. Modi has been instrumental in the Group's re-entry into the telecommunications business through Reliance Jio Infocomm Limited. He is leading the project which involves setting up one of the most complex 4G broadband wireless services in the world, offering end to end solutions that address the entire value chain across various digital services in key domains of national interest such as Education, Healthcare, Security, Financial Services, Government-Citizen interfaces and Entertainment.

Prasad has been a whole-time director, designated as Executive Director, of the Company since August 21, 2009. He has worked with Reliance for about 38 years, holding various senior positions in fibres, petrochemicals, refining and marketing and exploration & production businesses of Reliance.

Reliance, BP ink deal to set up fuel retail stations under Jio-BP brand

Mukesh Ambani-led Reliance Industries on Monday said its joint venture with BP will sell fuel under the Jio-BP branding. The two companies entered into an agreement relating to formation of the joint venture on Monday, RIL said in its statement.

In August, RIL announced a joint venture with BP for its fuel retail business in India. The company on Monday disclosed further details on the planned joint venture.

"BP and RIL today signed a definitive agreement relating to the formation of their new Indian fuels and mobility joint venture. This follows the initial heads of agreement signed in August this year," RIL said in a statement.

The venture is expected to be formed during the first half of 2020, subject to regulatory and other customary approvals. The joint venture will include an India-wide fuels retail service station network and aviation fuel marketing business.

RIL will also transfer ownership of its existing Indian fuel retail network and access to its aviation fuel business to the new joint venture. The company at present operates 1400 retail outlets and 30 aviation fuel stations in India.

"The venture expects to expand from RIL’s current fuel retailing network to up to 5,500 retail sites and 45 aviation fuel stations over the next five years to become the most preferred provider of automotive and aviation fuels," RIL said in its statement.

In addition to fuels,the joint venture will also offer other convenience and services. Part of its product portfolio will include Castrol lubricants. BP is Castrol's parent organization. “Castrol lubricants will be available across the venture’s network,” the statement said.

“BP and Reliance are combining their knowledge, expertise and experience to provide Indian consumers world class products and services. We believe that together we will bring solutions that will benefit the fast-growing Indian market," said Mukesh Ambani, chairman and managing director for RIL.

RIL will hold 51 per cent stake in the new joint venture, with the remaining to be held by BP. RIL, in August, said the 49 per cent stake in valued at Rs 7,000 crore.

“This major expansion of our business here reinforces our long-term commitment to India,” said Bob Dudley, group Chief Executive of BP.

For the July-September 2019 quarter, RIL reported double-digit volume growth in both diesel and petrol, while growth at the industry level saw a decline in both petrol and diesel. The company pegged volume growth for high speed diesel (HSD) at 14-15 per cent and for petrol at 17 per cent year-on-year.

Reliance Industries Ltd (RIL) on Thursday said its subsidiary has picked up 85 per cent stake in NowFloats Technologies for a cash consideration of Rs 141.63 crore.

The stake purchase is aimed at strengthening the group's digital and new commerce initiatives.

"Reliance Strategic Business Ventures Ltd (RSBVL), a wholly-owned subsidiary of RIL, has acquired equity shares of NowFloats Technologies for a cash consideration of Rs 141,63,78,822. The said investment represents 85 per cent holding in the equity share capital of NowFloats," RIL said in a BSE filing.

RSBVL proposes to make a further investment of up to Rs 75 crore, subject to achieving agreed milestones, and is expected to be completed by December 2020, it added.

Post the additional investment, the shareholding of RSBVL in NowFloats will increase to 89.66 per cent.

"The investment will further enable the group's digital and new commerce initiatives," the filing said.

Set up in May 2012, NowFloats offers SaaS (software as a solution) solutions to small and medium enterprises that enable them to get a digital presence. Its solutions include local content discovery platform, online business management suite, website promotion and marketing solutions.

An early stage company, NowFloats had a turnover of Rs 32.56 crore in 2018-19.

RIL to set up Rs 1.08-trillion digital arm, work on making Jio debt-free

Reliance Industries (RIL) on Friday announced a structure to make Reliance Jio (RJIL) debt-free, which is seen as a move to pave the way for a likely listing of its telecom business. As part of it, the company intends to transfer its telecom business and other digital initiatives to a wholly-owned subsidiary.

In the new scheme, RJIL’s debt will move to RIL. RJIL’s board approved an arrangement between RJIL and certain classes of its creditors, including debenture holders, for transferring identified liabilities of up to Rs 1.08 trillion to RIL.

RIL’s board also approved forming a wholly-owned subsidiary for digital platform initiatives and an investment of Rs 1.08 trillion in the subsidiary through optionally convertible preference shares (‘OCPS’). This is likely to be of a 10-year tenure.

The subsidiary will acquire RIL’s equity investment of Rs 65,000 crore in RJIL. It will subscribe to the optionally convertible preference shares.

“Given the reach and scale of our digital ecosystem, we have received a strong interest from potential strategic partners. We will induct the right partners in our platform company, creating and unlocking meaningful value for RIL shareholders,” said Mukesh Ambani, chairman and managing director, RIL.

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Analysts see this as a move to clear the path for the telecom arm’s listing, as announced by the RIL management during its annual general meeting in August this year.

After this, RJIL will have no debt except spectrum-related liabilities by March 31 next year, said RIL.

For RIL, the company said: “There is no impact on the consolidated debt.”

At the standalone level, where the debt is likely to increase, the company said: “It (the new capital structure) does not impact RIL’s standalone credit profile, given its robust cash flows and conservative leverage.”

The digital platform company with negligible leverage makes a compelling investment proposition for both strategic and financial investors, said the company.

With completing most of Jio’s capital expenditure, tower and fibre passive infrastructure assets of approximately Rs 1.25 trillion were demerged from Jio in March this year to infrastructure investment trusts (InvITs). After this demerger, Jio has become asset-light, having a balance sheet size of Rs 2.37 trillion, said RIL. The company said in a statement that Jio’s platform business included MyJio app, OTT platform JioTV, OTT platform Jio Cinema, news platform JioNews, and music-streaming platform JioSaavn.

Over 2018-19, RIL made strategic investments in start-ups such as pharma software provider C-Square, citizen SaaS provider EasyGov, AI learning platform Embibe, retail solution provider Fynd, logistics platform Grab, AI assistant platform Haptik, music streaming platform Saavn, deep tech start-up Tesseract, and vernacular language platform Reverie.

These get transferred to the wholly-owned subsidiary.

RIL has made significant investments in global tech start-ups such as DEN, Hathway, Eros International Plc, Edcast, Karexpert Technologies, Vakt Holdings, Indiavidual Learning Pvt. Ltd, Radisys Corp, and Kai OS Technologies.

Reliance Industries' market valuation tops Rs 9 trillion in intra-day trade

RIL’s market valuation topped Rs 9 trillion in intra-day trade on Friday, becoming the first domestic company to do so. Shares of the company rose as much as 2.3 per cent before giving up some gains to end at Rs 1,415, up 1.4 per cent. At close, the company was valued at Rs 8.98 trillion ($125 billion).

Shares of the Mukesh Ambani-led firm have added Rs 1.5 trillion in market cap since the government’s decision to lower corporate taxes. The stock has been particularly on fire since the start of 2017, having gained 2.6 times since. Currently, RIL ranks 68th globally in terms of market value.

Analysts are betting that RIL will become India’s first company to touch $200 billion (Rs 14.3 trillion at today’s exchange rate) in market cap. Earlier this week, BofA Securities ( formerly Bank of America Merrill Lynch) said the company was on the path to $200 billion market cap.

The brokerage has identified three “incrementally transformational drivers” that will help take the company to that level. These include new commerce initiatives; entry in SME enterprise space with Microsoft; Jio’s fiber broadband rollout; and digital initiatives such as advertising.

RIL reports 18% jump in Q2 net profit to a record Rs 11,262 crore

Mukesh Ambani-promoted Reliance Industries Ltd on Friday reported 18.3 per cent increase in its net profit at Rs 11,262 crore for the quarter ended September 30, 2019, following robust growth in retail and digital service businesses. The 27 per cent and 43 per cent growth in revenue from retail and digital services was partially offset by decrease in refining and petrochemicals primarily on account of over 17 per cent fall in Brent crude price, the company said in a statement.

Its profit before tax increased by 14 per cent to Rs 15,055 crore for the quarter. Its consolidated revenue stood at Rs 163,854 crore, an increase of 4.8 per cent as compared to Rs 156,291 crore in the corresponding period of the previous year.

Reliance Jio's profit before tax increased by 45.2 per cent to Rs 1,525 crore while its revenue increased by 33.1 per cent to Rs 14,562 crore during July-September 2019.

RIL said despite the slowing growth environment, its revenue from the retail business for the quarter surpassed the milestone of Rs 40,000 crore. "To put the scale in perspective, this is higher than the annual revenue registered by the next largest retailer in the country," it said.

Exports (including deemed exports) from RIL's India operations were lower by 12.1 per cent at Rs 53,161 crore as against Rs 60,460 crore in the corresponding period of the previous year primarily due to lower price realization for refining and petrochemical products and emphasis in domestic placement.

Its outstanding consolidated debt as on September 30, 2019 rose to Rs 291,982 crore compared to Rs 287,505 crore as on March 31, 2019.

Mukesh Ambani, chairman and managing director, RIL, said, "The record net profit for the quarter reflect benefits of our integrated oil-to-chemicals (O2C) value chain and the rapid scale-up of our consumer businesses. During this quarter, our O2C businesses gained from favourable fuel margins environment, feedstock sourcing flexibility and higher petrochemicals volumes."

With new partnerships, the O2C business is best placed to pursue growth and substantial value creation, he said. Saudi Aramco and RIL had earlier signed a non-binding letter of intent for a proposed investment in O2C division comprising refining, petrochemicals and fuel marketing businesses of RIL. Saudi Aramco's potential 20 per cent stake is based upon an enterprise value of $75 billion for the O2C division, said a RIL statement. This would be one of the largest foreign investments ever made in India.

Alongside, BP and RIL agreed to form a new joint venture that will include a retail service station network and aviation fuels business across India. RIL will get approximately Rs 7,000 crore from BP's investment in this joint venture.

Mukesh Ambani ups stake in Reliance Industries by 2.71%; stock falls 1.12%

Taking advantage of the low share prices, the promoter entities owned by Mukesh Ambani, chairman of Reliance Industries

(RIL), raised their stake by 2.71 per cent to 48.87 per cent in RIL. The market value of RIL on Tuesday was Rs 7.58 trillion. The additional stake was acquired by Reliance Services and Holdings (controlled by Petroleum Trust, part of the promoter group). RIL shares closed at Rs 1,197 apiece, down 1.12 per cent.

RIL has built foundation for next decade in FY19, says Mukesh Ambani

The last financial year, which saw Reliance Industries’ (RIL) consumer business grow, has built a strong foundation for the next decade, said Chairman and Managing Director Mukesh Ambani, in a letter to shareholders. The company will hold its 42nd annual general meeting (AGM) on August 12.

The agenda for approvals at the AGM includes the re-appointment of Nita Ambani as non-executive director, and P M S Prasad as whole-time director on the board.

The 42nd AGM comes in the backdrop of a busy year, during which RIL witnessed refinancing of debt and the transfer of certain liabilities to the infrastructure investment trust (InvIT). In addition, the group’s consumer business is now growing significantly, while its core business faces macro headwinds.

In his letter to the shareholders in the FY19 annual report, Ambani had said: “Consumer businesses witnessed phenomenal growth in terms of revenues and profitability, with Reliance Retail and Jio now collectively contributing nearly 25 per cent earnings before interest, taxation, depreciation and amortisation (Ebitda) of the consolidated segment.”

This share has risen further, with the consumer business now contributing 32 per cent to the same, in the June quarter.

As part of the company’s liability management during FY19, the company also saw long-term financing of $2.7 billion syndicated term loan refinancing exercise. "This was the most widely syndicated loan by Reliance till date, with participation from 44 banks and a total amount of $1 billion syndicated," the company said in its annual report. In addition, Reliance Jio also tied up ¥53.5 billion, through the largest Samurai loan for an Asian corporate, and also for a telecom company.

Ambani added in the letter: “The year has set a robust foundation for the golden decade.” In a volatile hydrocarbon chain environment, RIL recorded its highest-ever consolidated net profit of Rs 39,588 crore ($5.7 billion) during the year, registering a growth of 13.1 per cent YoY.”

Further, he said: “The strong financial performance also reflected the increasing contribution of consumer businesses in Reliance’s earnings.”

According to the annual report, Ambani's salary remained capped at Rs 15 crore, in line with the 2009 decision to cap his remuneration.

“Reflecting his desire to continue to set a personal example for moderation in managerial compensation levels,” the annual report stated.

Reliance Industries buys British toy retailer Hamleys for about Rs 620 cr

Mukesh Ambani-led Reliance Industries (RIL) will acquire British toy retailer Hamleys for a cash consideration of £67.96 million (about Rs 620 crore), the company said in a statement on Thursday.

“Reliance Brands, a subsidiary of RIL, and C. banner International Holdings, a Hong-Kong listed company, today signed a definitive agreement for Reliance Brands to acquire 100 per cent shares of Hamleys Global Holdings, the owner of the Hamleys brand, from C. banner International,” the company said in its statement to the BSE. At present, RIL has the master franchise in India for Hamleys and operates 88 stores across 29 cities. “The worldwide acquisition of the iconic Hamleys brand places Reliance into the frontline of global retail,” said Darshan Mehta, president and chief executive officer, Reliance Brands. Globally, Hamleys has 167 stores across 18 countries.

RIL’s retail business, which had no international presence, will mark the company’s entry into global retailing after Hamleys’ acquisition. The Indian toy market alone, according to industry experts, is estimated Rs 10,000 crore, expected to double in five-seven years. Growth will be led by higher disposable incomes, presence of a large number of children (around 444 million Indians are below the age of 18 years) and the trend of nuclear families. Key players include Funskool, Lego, Mattel and Hasbro. Reliance, say experts, will have an advantage with Hamleys’ 88-store network in the country. This number is expected to be taken to around 200 stores in the next two to three years.

Hamleys’ global business operations have been under pressure and loss-making. In 2015, C. banner International had paid $153 million for Hamleys, and since then the toy retailer has witnessed declining sales and valuations amid intense competition from online stores. Hamleys was put on the block in October last year. Once the deal is complete, RIL will be the fourth owner of the iconic chain in the past 15 years.

The past 12 months have seen a significant number of sale and purchase deals for RIL. In the current financial year, this is third deal activity that the company has reported. In April, the company sold a significant stake in six companies, which own its very large ethane carriers, for an undisclosed amount and invested around Rs 700 crore in artificial intelligence start-up Haptik.