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Reliance industries limited 2014.


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The company. from the beginning till the end.

Published in: Investor Relations
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Reliance industries limited 2014.

  1. 1. Past and the present… • RELIANCE COMMERCIAL COPORATION • Started in 1958 by Dhrubhai Hirachand Ambani with his cousin Champaklal Damani. • Fixed capital- Rs.15000. • Business mission of importing polyester yarn and exporting spices to Yemen. • Partnership with his cousin ends in 1965. • He founded Reliance Industries in 1966. • RELIANCE TEXTILES • In 1966, 1st textile mill was established at Naroda in Ahmedabad. • Started Reliance Textiles under the brand name “VIMAL”. • The brand was the first to use cricketers as brand ambassadors,the likes of former Australian captain Allan Border and legendary West Indian batsman Vivian Richards endorsed the brand. • In 1975, world bank visited reliance textiles and certified as the “BEST POLYESTER CLOTH”. • INITIAL PUBLIC OFFERING •Started the equity cult in India. • More than 58,000 investors from various parts of India subscribed to Reliance's IPO (Initial public offering) in 1977. • Ambani's net worth was estimated at about 1 billion by early 1980s. • In 1986, the annual general meeting of Reliance Industries had number of firsttime retail investors investing in Reliance.
  2. 2. And the story • DIVERSIFICATION • Reliance began the process of backward integration, setting up a plant to manufacture polyester filament yarn. (1991,Patalganga) • He subsequently diversified into chemicals, petrochemicals, plastics, power. • The final phase of Reliance’s diversification occurred in the 1999 when the company turned aggressively towards refining(Jamnagar) and subsequently towards telecommunications. Reliance after Dhirubhai Ambani • Family feud with the two brothers fighting over ownership post death of Dhirubhai Ambani in July 2002. • In November 2004, Mukesh Ambani in an interview, admitted to having differences with his brother Anil over 'ownership issues.' He also said that the differences "are in the private domain." • On June 18, 2005, Kokilaben Ambani announced the settlement through a press release.
  3. 3. TOWARDS THE PRESENT • RELIANCE GROUP • The Reliance empire was split between the Ambani brothers, Mukesh Ambani getting RIL and IPCL • Anil Ambani heading Reliance Capital, Reliance Energy and Reliance Infocomm. • The entity headed by Mukesh Ambani is referred to as the Reliance Industries Limited • Anil's Group was renamed Reliance Anil Dhirubhai Ambani Group (Reliance ADA Group). • Reliance Institute of Life Sciences, a Dhirubhai Ambani Foundation Initiative, was established to promote higher education in various fields of life sciences and related technologies
  4. 4. RELIANCE INDUSTRIES LIMITED • Today RIL has 96 subsidiaries with businesses in Petroleum refining, Petrochemicals- Polyester and fibre intermediates, Retail, Media & Entertainment, and Telecommunicaton(Jio). The telecom business is set to be launched in May 2015 after it took over IBNL which had a BWA network license in India. • Reliance has always believed being two steps ahead of its competition and has been the pioneer in bringing worldclass technology before anyone else in the country. • Growing importance across the globe • Largest refining capacity at any single location(Ahmedabad: 1.4MBPD of crude proc.) • Largest producer of Polyester Fibre and Yarn • 5th largest producer of Paraxylene (PX) • 5th largest producer of Polypropylene (PP) • 8th largest producer of Mono Ethylene Glycol (MEG) • 9th largest producer of Purified Terephthalic Acid (PTA)
  5. 5. Consistent Value Creation Particulars 2013-14(Rs Crore) 2012-13 (Rs Crore) Growth (%)YOY CAGR 10years % Trunover 4,46,339 4,08,392 8.1 21.7 PAT 22,493 20,879 4.7 15.6 Networth 1,97,074 1,79,995 9.5 19.1 Market Cap 3,00,405 2,49,802 20.3 14.9 Total assets 3,67,583 3,18,511 15.5 17.8 Exports 2,75,825 2,39,266 15.3 33.8 As on 10th August 2014,Reliance ranked • Most valuable company in terms of net profit. • 2nd most valuable company by net sales. • & 3rd most valuable company by market capitalization. • Awarded most efficient and environment friendly plants in the country.
  6. 6. Consistent value creation : Significant contribution to India's economic growth •14.7% of India’s total exports •4.8% of the Government of India’s indirect tax revenues •4% of the total market capitalization in India •8 Weightage in the BSE Sensex •6.7% Weightage in the NSE Nifty •69% of revenue through exports,largest contributor to India’s export. •S&P rated RIL two notches above India sovereign rating to BBB+ confirming its strong financial metrics and liquidity position in its sector. •Currently employs 24000 people directly and
  7. 7. Petrochemicals Telecom Textiles Oil and Gas Retail Media & Entertainment Reliance Industries Limited
  8. 8. Textiles • Started Reliance with this business. • World’s largest Polyester manufacturer. • Set up plant in 1981, one of the last to do so and rose to become the biggest player in the segment by mid-nineties . • One of the finest examples of backward integration. • Product portfolio includes Polyester, Apparel fabrics, Home textiles, Technical textiles and non-wovens, industrial fabrics, conveyor belts etc. • Comined revenue alongwith Petrochemicals accounts for 21% of its revenue.
  9. 9. Refining • Contributes to 78% of the revenue. • Weaker refining due to new refining capacity in Middle East and Asia,however its flexibility and efficient product placement coupled with weaker rupee helped it deliver record performance and 110% capacity utilization at Jamnagar plant(68MMT). • With 1.24 Million Barrels Per Day (MBPD) of nominal crude processing capacity, it is the single largest refining complex in the world. The merger of Reliance Petroleum Limited (RPL) with Reliance Industries Limited (RIL) has enabled seamless integration of operational scale and financial synergies that existed between the two Companies. • Competitive advantage: Capable of catering across 7 product grades helping RIL penetrate into high value niche market especially in Jet, Alkalyte and Gasoline segment. • Integrated supply and trading with offices in Houston , London, Singapore and Mumbai. • Seasonality capturing/prompt local opportunity and strategic tankage at major hubs. • Enabled with petcoke gasification which lowers energy cost.
  10. 10. KG-D6 –Oil and Gas field • Worlds most complex deep sea Oil and gas exploration plant in the Krishna Basin in Andhra Pradesh, • In joint collaboration with BP and Canada’s Niko resources. • Plant based of a 8800sq km KG basin Gas reserve field handed over to Reliance in 1999 under National elploration and licensing policy(NELP). • Produces 190 BCF of gas and 2.3MMBBL annually. • Additional gas and oil production from MA-08 basin has offset the decrease in production from D6. • Net output to double once all three fields are operational.
  11. 11. Petrochemicals • Has an overall market share of 29% in India and leads the produer market. • Produces combined PE,PP and PVC(polymers) at 4MMTPA • Commissioned zero waste plant at Silvassa which further vncreased capacity by 20%. • Has over 19brands under this business and largest supplier to industries like Tyres, Footwear,Conveyor belts,Sack,Pipes, insulation,bottles,cables and manymore.
  12. 12. Retail- Aapka market, aapka faayda. • Largest retailer by Revenue with a market share of 8%. • Has its business spread in Apparels, Footwear, Sports goods, Jewellery and electronics. • Over 1600 spread across tier 1, 2 and 3 cities and an annual addition of 200 stores. • One of the largest consumer loyalty programme, Reliance one- over 6.74lakh members. • Has attained leadership in wholesale cash and carry segment with 32 operational stores and 1.2million members. • 61% of the total Apparel sales revenue by selling its own brands, which gives competitive advantage of having the lowest wholesale prices. • JV with major international brands for selling its prducts at Reliance stores.
  13. 13. Media and Entertainment and Telecom • Forayed into Telecom in 2009 with takeover of IBNL and to be operational in 2015 across India with 4G service • M&E : First step with stake buyout in media house Viacom or TV 18. • Already has a stake in IMG, the world leader in Celebrity and Sportspersons management company.Also owns IPL Cricket Franchise Mumbai Indians. • In telecom, has already layed the biggest optical fibre network in the country and has signed an agreement with Bharti infratel for tower sharing. • Also signed agreement with RCOM and Bharti Infratel for intercity and deep-sea optical fibre network sharing.
  14. 14. Company overview • Robust growth in export. • First 4G service provider in India. • More consumer centric product development strategy. • Evolving its core-competency from textiles to refining and now towards telecom and retail. • Has been fined by GOI Rs 16000 crore for under utilization of KG-D6. • Textile business faces stiff competition from Chinese markets over margins. Short Sellers stay away. Long term- Buy and Hold.