RIL lines up Rs 35000 cr capital spending plan

Reliance Industries (RIL) has chalked out a Rs 35,000 crore investment plan spread over five years in the oil & gas and petrochemicals sectors.

The company will invest Rs 4,000 crore in exploration and production business; Rs 15,000 crore in developing its gas finds in the Krishna Godavari Basin in Andhra Pradesh; Rs 7,000 crore on its petroproduct retailing outlets; Rs 6,000 crore in petrochemicals with the balance Rs 3,000 crore being spread across ongoing modernisation and maintenance.

The company is planning to ramp up its petrochemicals capacity to 15 million tonne from 12.5 million tonne at its three facilites at Patalganga (in Maharashtra), Hazira and Jamnagar (both in Gujarat).

Post expansion, its paraxylene capacity is expected to be around 2 million tonne and will be the world's largest polyester yarn and filament. It is also setting up butadene and styrene units at Jamnagar.

"The company's capital expenditure plans will account for around 50 per cent of its aggregate cash flows unlike 40 per cent in the past. Our capex plans are adequately covered, we will raise the future capex throguh internal accruals and debt and there is no reason to issue any further equity,' said Anil D Ambani, vice-chairman and managing director of RIL.

Ambani pointed out that 95 per cent of its revenues will come from the energy chain and the aggregate group cash flows of Rs 50,000 crore in the next five years.

He pointed out that the "targeted consolidated net profit growth of 25 per cent year on year".

The company has increased its focus on high value premium petrochemical products with speciality grades contributing 19 per cent of sales and generating a premium of 5-14 per cent over commodity prices.