Reliance Continued Its Growth Plans Despite Covid, Now Has Strong Balance Sheets: Mukesh Ambani

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Reliance Industries Chairman Mukesh Ambani said India would emerge stronger from the Covid-19 pandemic with the help of collective efforts from all sectors. “The COVID-19 pandemic disrupted several lives and dealt a severe blow to the economic health. In these challenging times, the most remarkable and satisfying achievement of the company has been its humanitarian efforts and the war against COVID is far from over, we, the Reliance Family are confident that in the end we will prevail,” he said in the company’s annual report.

In the company’s latest annual report released on Wednesday, he said the company sold minority stakes in Jio Platforms – the unit that houses its telecom and digital business – and retail arm for almost Rs 2 lakh crore, 49 per cent in fuel retailing venture for Rs 7,629 crore and raised another Rs 53,124 crore through rights issue.

“We now have a strong balance-sheet with high liquidity that will support growth plans for our three hyper-growth engines Jio, Retail and O2C,” he said. During 2020-21, Reliance completed India’s largest ever Rights Issue of Rs 53,124 crore (oversubscribed by 1.59 times), which was also the largest in the world by a non-financial institution in the last 10 years.

“During the year, Jio Platforms and Reliance Retail raised Rs 1,52,056 crore and Rs 47,265 crore respectively from strategic and financial investors, including Facebook and Google,” he said. “bp invested Rs 7,629 crore for a 49 per cent stake in our fuel retailing business.” While the company sold almost 15 per cent stake in Reliance Retail Ventures Ltd, it lowered its shareholding in Jio Platforms Ltd to 66.3 per cent from 100 per cent a year back. It holds 100 per cent in the O2C business for now. It has been talking to Saudi Aramco to sell a 20 per cent stake in O2C for an asking of USD 15 billion. These fund raise helped Reliance reach net zero-debt target ahead of schedule. “We executed the largest ever capital raise in India, of Rs 2,60,074 crore (USD 36 billion), through rights issue and asset monetisation. The fund raised, along with capital commitments, exceeded net debt levels, helping your company achieve a net debt free balance sheet ahead of the stated timeline of March 2021,” he said.

The company was able to achieve the highest ever pre-payment of debt undertaken by any corporate borrower in India, he said. “Despite unprecedented challenges, we continued to execute on our growth plans across businesses. We achieved the highest ever pre-payment of debt undertaken by any corporate borrower in India. We have a strong balance-sheet and the high liquidity will support growth plans for our three hyper-growth engines – Jio, Retail and O2C,” he said.

Amid coronavirus-induced lockdown, the Jio was able to compensate by ramping up digital commerce solutions, including JioMart which is gaining more traffic, active users and orders. With its next-generation all-IP data network, Jio continued to revolutionise digital adoption and innovation spearheading the country’s digital potential.

Noting the success of JioMart, it also said Ajio.com witnessed a three times increase in business on higher orders and improvement across all metrics.

Despite the restrictions, Reliance has managed to achieved 100 per cent O2C capacity utilisation. Reliance operated its O2C facilities by shifting products to export markets to sustain operating rates. The company has initiated the proceedings of carving out its O2C businesses into a separate subsidiary. The process is expected to be completed in CY 2021.

The annual report notes severe demand destruction due to global lockdowns impacted O2C business. However, flexibility in operations and agile response to changing market dynamics enabled operations at near-normal levels and deliver industry-leading results.

Scale economics along with strong competitive cost positions across the chain helped Reliance sustain a positive contribution amid the covid-19 crisis, the company said.

The oil major pointed that Reliance BP Mobility Ltd (RBML) is the first Oil Marketing Company (OMC) to get the approval of Mobile Dispensing Unit and the only OMC to use HDPE containers (non-metallic) for on-demand delivery of fuel. With its services spanning across India, it is uncovering the latent needs of the non-transport sector, and meeting these needs with great efficiency, leading the way to market leadership in the non-transport sector, it observed.

Earlier in the year, Qualcomm and Jio successfully tested 5G solutions in India and achieved the 1 gbps milestone.

Addressing the global action on climate change, the company said to accelerate new energy and new materials business for clean and green development and Reliance has set a target to become net carbon zero by 2035, and achieve best-in-class standards across environmental, social and governance (ESG).

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