As RIL announces big capex plans, analysts fear dent in return ratios

Speaking at the AGM, Mukesh Ambani announced plans to invest Rs 2 trillion in set-up a nationwide fifth generation (5G) mobile network by the end of next year

Reliance Industries (RIL) announced the next big phase of growth and expansion plans at its 45th annual general meeting (AGM) on Monday. The planned new investment in its telecommunications, oil-to-chemicals (O2C), and green energy business will consolidate RIL’s market dominance and industry, but the company’s mega investment plan has raised fears of further decline in its already low return on networth (RoNW) and return on capital employed (RoCE). This, in turn, will weigh on RIL share price and market capitalisation.

The company reported RoNW or return on equity of 9.17 per cent on a consolidated basis in 2021-22 (FY22), up