Reliance Industries (RIL) believes that the restructuring of its oil-to-chemical business (O2C) will facilitate value creation and attract a dedicated pool of investor capital in the company.
In its annual report for 2020-21, RIL said it has initiated the proceedings of carving out its O2C businesses into a separate subsidiary and the process is expected to be completed in CY 2021. O2C reorganisation creates an independent, global-scale growth engine for RIL, with a strong cash flow generation potential while facilitating value creation through strategic partnerships and attracting a dedicated pool of investor capital.O2C's goal is to maximise crude to chemicals conversion and create a sustainable growth business. The scheme received an overwhelming support from RIL's shareholders and creditor.
Through the COVID-19 crisis, RIL operated its O2C facilities at near 100% by shifting products to export markets to sustain operating rates. Scale economics along with strong competitive cost positions across the chain helped Reliance sustain positive contribution through this unprecedented phase. Diversified customer base, global product placement and feedstock flexibility supported performance.
The conglomerate released its annual report for the financial year 2020-21 after trading hours on Wednesday (2 June 2021).
Mukesh Ambani said RIL now has a strong balance-sheet with high liquidity that will support the growth plans for telecom, retail and O2C. The highlight of financing activity in FY 2020-21, was an early prepayment of $7.8 billion of long-term foreign currency debt, undertaken in 2Q and 3Q FY 2021, with requisite approvals from the RBI. This is the highest ever prepayment of debt undertaken by any corporate borrower in India.
During the fiscal, RIL raised Rs 2,60,074 crore ($36 billion), through rights issue and asset monetisation, which is the largest by an Indian company. The funds raised, along with capital commitments, exceeded net debt levels, helping the company to achieve a net debt free balance sheet ahead of the stated timeline of March 2021.
The company remains firmly committed to efficient financing of its working capital, across all formats of businesses, and maintains a strong liquidity position with more than Rs 2.5 lakh crore of cash and cash equivalent in its consolidated balance sheet.
The company said that it will continue to upgrade the strategy and roadmap with an endeavor to achieve Net Carbon Zero target sooner than 2035.
RIL said that gas is expected to play a key role as a transition fuel and share of gas in energy mix is expected to increase from 6% to 15% by CY 2030. RIL, with development of three deepwater gas projects in KG D6, will continue to play a key role.
While two projects have been successfully commissioned, one project is expected to come onstream in FY 2022-23. With this, RIL is expecting to reach a peak production of approximately 30 MMSCMD in CY 2023, i.e., approximately 25% of India's production and approximately 15% of India's demand.
Qualcomm and Jio successfully tested 5G solutions in India, achieving the 1 Gbps milestone on Jio 5G solution.
Meanwhile, RIL has submitted a proposal for the use of an oral, anti-viral drug Niclosamide as a potential Covid-19 medicine. Niclosamide is an antihelminthic used for the treatment of tapeworm infections. RIL, which mentioned about the application in its annual report for financial year 2021, did not provide any further details.
RIL's 44th Annual General Meeting (AGM) will be held on June 24 at 14:00 IST through video conferencing and other audio visual means (OAVM).
RIL is the largest private sector corporation in India. Its activities span hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, retail and digital services.
On a consolidated basis, RIL reported 108.36% surge in net profit to Rs 13,227 crore on 9.59% increase in net sales to Rs 149,575 crore in Q4 March 2021 over Q4 March 2020.
The scrip rose 0.61% to currently trade at Rs 2214.70 on the BSE.
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