Mumbai : Reliance Industries Limited (RIL) plans to invest Rs.180,000 crore ($30 billion) in its various businesses including oil and gas, retail and telecom in the next three years, company’s chairman and managing director Mukesh Ambani said on Wednesday.
RIL’s arm Reliance Jio Infocomm will launch fourth-generation (4G) broadband services in a phased manner in 2015, Chairman and Managing Director Mukesh Ambani said in his address to shareholders at RIL’s 40th Annual General Meeting. The petrochemicals-to-retail giant was initially supposed to launch its high-speed data services by the middle of this year.
Reliance Jio is currently undertaking limited field trials of the service, and expanded field trials will commence in August and continue till the early part of 2015, Ambani said.
The Street took a negative view of this perceived delay in the launch, with shares erasing gains. RIL shares ended down 2.1% at Rs 1,066.75 on the NSE.
RIL will invest Rs 1.8 lakh crore in margin-enhancing petrochem units, expansion of the energy business, opening more retail stores and the rollout of the telecom venture. This was the 37th AGM of Reliance since it became a listed company.
‘Fortune 50 firm’
With his mother Kokila Ambani, wife Nita Ambani and children watching, Mukesh Ambani said RIL, which is currently ranked 135 on the Fortune 500 list of global companies, is looking at breaking into the top 50 in the next 2-3 years. RIL is currently ranked 135th on the Fortune 500 list of global companies. At the AGM, Nita Ambani was inducted into the company board as the first woman director, thereby meeting a new law requiring listed companies to have at least one woman in the boardroom to boost gender diversity.
“In the past 37 years, we invested Rs.240,000 crore and in the current three years’ investment cycle, we will be investing over Rs.180,000 crore,” Ambani said. “We are currently at the mid-point of the largest investment programme in Reliance’s history,” he said. Ambani said the next three years would be transformational in RIL’s history.
“The next two years, 2014-15 and 2015-16, will see us focused on executing and progressively bringing these projects on-stream in petrochemicals, refining, retail and Jio,” he said.
“The year 2016-17 will be the first full year in which the complete benefits of all these investments will be available to our shareholders, customers and society… We hope to accomplish as much in the next three years as we have achieved in the past 37 years,” he added.
“Petrochemicals business will benefit from the highest allocation of capital among our three energy businesses,” Ambani said.
Among the projects currently being undertaken by the petrochemicals division, RIL is developing a 395,000 tn capacity polyester filament yarn facility at Silvassa, and a butyl rubber joint venture of 100,000 tn capacity at Jamnagar, he said. These projects will come on stream in the next two years.
The company, which returned to the telecom sector in 2010 with the Rs 4,800 crore acquisition of Infotel, is investing Rs 70,000 crore ($11.7 billion) in the business that will eventually span each of India’s more than 6,00,000 villages. Ambani said 4G broadband business under Reliance Jio will be the “most transformational initiatives of Reliance” over the next few years.
Ambani said limited field trials with initial set of services are already underway and “the year 2015 will see the phased launch of Reliance Jio across India”.
“Expanded field trials will commence in August this year across multiple cities. These trials would continue through the end of 2014 and early part of 2015,” he said. “The objective is to ensure that everything that we offer is future proof and world class.”
On retail business, Ambani said: “We are confident of doubling retail business every 3-4 years. Retail will emerge as a major growth engine for consumer business.
While it looks to increasing output from its eastern offshore gas fields, RIL will begin extracting gas from coal seams (coal-bed methane or CBM) in Madhya Pradesh in 2015-16. To shareholders queries, he said the company will raise Rs 60,000 crore in debt over the next two years but will be debt-free on an overall basis by 2017 with a large cash pile.
BP chief meets Oil Min on India projects, gas price
With delays in regulatory nod and gas price revision frustrating its attempts to reverse falling gas output from KG-D6 field, BP chief executive Bob Dudley met Petroleum Minister Dharmendra Pradhan to press for early decisions.
Dudley, along with BP India head Sashi Mukundan, met Pradhan on the sidelines of the World Petroleum Congress in Moscow to make a case for early decisions, officials said. BP, which in 2011 bought 30 % stake in Reliance Industries’ 21 oil and gas blocks, including KG-D6 for $7.2 billion, has been frustrated by the delays in getting approvals for plans to revive the sagging output from eastern offshore KG-D6 fields.
Officials said Dudley raised the issue of gas prices not being revised on the due date of April 1 as also KG-D6 revival plans getting stuck in redtape.
“You just have to look at the natural gas prices around the world. It seems not right that it would be more economic to produce gas in Australia and sell it into India at USD 20 per million cubic feet, than be able to develop the resources in India,” he said.