Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Reliance - king of the hill - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jul 7, 2000

    Reliance - king of the hill

    What started out as a small synthetic textile unit two decades ago, is today the largest synthetic textile manufacturer in the country. Reliance to continue this meteoric growth has in the last few months indicated it new growth initiatives.

    In the existing business it has consolidated its position even further. It has acquired an aggregate of 140,000 tonnes of polyester capacity in the last two years (Raymond Synthetic, J.K Corp & India Polyfibres) and is on the prowl for more. Its biggest coup will be if it is able to acquire Indian Petrochemical Corporation Ltd (IPCL). This would make it by far the undisputed king in the polymers industry.

    The basic feedstock for the petrochemical sector is Naphtha, which hitherto was being imported by Reliance for its operation. It has integrated backwards into crude refining, by setting up a 27 m tonne refinery at Jamnagar. The plant is the largest in India and has come on stream in record time and now eliminates Reliance's exposure to the international prices of naphtha.

    However, although it now has in house access to naphtha it has exposed itself to the international prices of crude. To overcome this shortcoming it has made a formed a Joint Venture (JV) with Enron and ONGC for oil exploration & production (E&P). Under the New Exploration Licensing Policy it has acquired the Panna- Mukta and Tapti fields. The project has involved a cost of Rs 29 bn.

    As per the latest reports, Reliance is also making a foray into Liquefied Natural Gas (LNG). It plans to enter into a JV with National Iranian Oil Company (NIOC) and Petronas of Malaysia for a LNG liquefication plant in Iran. The LNG will be imported and for this it is planning to set up the largest LNG facility in Jamnagar, India. The facility involves the setting up of a 7.5 m tonne per annum LNG terminal. The gas will be used as feedstock for its power plants the rest will be marketed in Maharashtra and Gujarat.

    With access to feedstock for power a logical extension would be to enter power production. Reliance has plans to set up 10,000 mega watt (MW) in the next 4-5 years. It has already set up captive power plants at Jamnagar and Patalganga.

    Moving from the old economy to the new economy. Reliance has been awarded cellular licenses in 13 circles covering seven states. It has also been awarded basic telephony license for Gujarat. As per their latest announcements they plan to enter into broad band. This project envisages an investment of more than Rs 140 bn networking 115 cities across India.

    Reliance has been amongst the very few Indian companies that have been able to cope with the challenges of liberalisation. It has moved, in Internet jargon, at net speed from being a textile manufacturer to an integrated infrastructure service provider.



    Equitymaster requests your view! Post a comment on "Reliance - king of the hill". Click here!


    More Views on News

    Sorry! There are no related views on news for this company/sector.

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    Proxy Plays: A Smart Way to Bet on 'Off Limits' Companies(The 5 Minute Wrapup)

    Aug 4, 2017

    The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 16, 2017 (Close)


    • Track your investment in RELIANCE IND. with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks


    Detailed Quarterly Results With Charts