RIL commits $9 bn for Jamnagar

Reliance Industries' shareholders today gave Chairman Mukesh Ambani a standing ovation at the company's 33rd annual general meeting, to congratulate him on receiving a doctorate from Baroda's Maharaja Sayajirao University.

The RIL chief may have received several such ovations before. But this time he was visibly embarrassed as a couple of shareholders even recited poems praising him.

Many of them were expecting a "favourable announcement", perhaps a bonus issue, in the 30th year since the company was listed. But Ambani pointed out that any decision on such a matter would have to be taken by the board which would meet on Thursday to consider the quarterly results.

Then, the chairman delivered a power-packed speech describing a five-pronged strategy to make the company a global leader.

Reliance, India's most valuable company with a market value of over Rs 3,82,000 (about $97 billion), sees acquisitions and initiatives in agriculture and rural areas as key growth drivers, he told shareholders. "Reliance is actively pursuing an acquisition mode of growth," Ambani said, adding it was shifting strategy of building businesses from scratch as it faced intense competition, limited market opportunity and rapid changes in technology. He mentioned RIL's recent acquisitions in Malaysia and Africa as "forerunners to the unfolding of an acquisition-led strategy."

Reliance has investments that will fetch $28 billion (Rs 1,12,000 crore) at current prices, giving the company the finances to pursue growth options of "significant size and scale", he said. The company plans to build chemicals businesses in Egypt and Russia and expects to make new hydrocarbon discoveries.

Before schedule

The chairman said Reliance plans to invest $8-$9 billion (Rs 32,000 crore-Rs 35,000 crore) over three to four years at its petrochemical and refining complex in Gujarat.

Its subsidiary Reliance Petroleum is building a 5,80,000 barrels per day refinery at the Jamnagar complex that would be completed ahead of schedule.

The facility, which is coming up near Reliance Industries' 660,000 barrels per day refinery, was scheduled for completion by the end of next year. Ambani said Reliance Industries' paraxylene capacity would jump to 4.5 million tonnes a year from 1.9 million tonnes in two phases.

Paraxylene is used to make polyester and plastics.

Retail story

Ambani said Reliance's retail venture, which had set up 300 stores in 30 cities and employed 6,000 staff, did not threaten small shopkeepers and traders.

Reliance is spending more than $5.5 billion in its retail business but plans have faced protests from small traders, forcing it to shut down some stores and lay off workers.

"We are sensitive to the interests of small shopkeepers. Our retail initiative will in no way jeopardise their interests and that of small vendors, who service consumers," Ambani said, adding the retail venture would help, not hurt, small traders. "Our initiative will enable them improve their income and serve consumers better." Shares in Reliance Industries lost 2.39 per cent (or Rs 62.80) in a weak market, after hitting an all-time high of Rs 2,724, to close at Rs 2566.85 on the Bombay Stock Exchange on Friday.

The stock has more than doubled this year, driven in part by hopes for a stocks split, traders said.

Reliance Petroleum, in which Chevron Corp holds 5 per cent, also closed slightly lower at Rs 173.45, down 1.85 per cent (or Rs 3.25) from its previous close, after touching an all-time high of Rs 182.65 in intraday trade.