Reliance outlook for future
During the AGM RIL chairman Mukesh Ambani announced that RIL will sell a 20 percent stake in its oil to chemical business to Saudi Arab Oil Company (Saudi Aramco). This is one the finest and the best announcements that Reliance has made after so many years of hard work in creating one of the best infrastructures for converting oil to chemical. Saudi Aramco will Acquire a 20 percent in oil business for an enterprise value of 75 Billion Dollars.
This value addition will take reliance industries footprint global as far as the businesses are concerned and shareholders have a big win from the Aramco announcement as the share price on the very next day surges 10 percent. Brokerage houses have also revised price target due to the announcement made at the AGM mainly due to 2 factors,firstly the Aramco deal and Secondly that Chairman has made announcement that Reliance would turn into a debt free company by in next 18 months and make it a de-risked company.
As far as the EBITDA is concerned with the current announcements post divestment of petro-chemical business and increase in revenue from the consumer based products (JIO and Reliance retails) it is clear that around 50% of the earning will come from these product and and another half from petro-chemicals. One has to also watch out for what Reliance industries would do with the monetisation of fibre optic assets of JIO as the value of fibre assets is going to kick in at a much higher value than what currently the market is estimating.we can expect more to come as capacity utilisation of jio network is only 20 percent.
Reliance is attracting top global companies like Saudi Aramco and Microsoft, the future business synergies can lead to much betterment for them.Over the period of 40 years RIL has periodically transformed its core business through backward integration. First it was textiles then it was polyester followed by chemicals and then refining and in the past few years a lateral shift has happened with more focus on Retails and telecom as the energy business is in threat due to shift from fossil fuel to renewable energy and Ambani acknowledges that.
This value addition will take reliance industries footprint global as far as the businesses are concerned and shareholders have a big win from the Aramco announcement as the share price on the very next day surges 10 percent. Brokerage houses have also revised price target due to the announcement made at the AGM mainly due to 2 factors,firstly the Aramco deal and Secondly that Chairman has made announcement that Reliance would turn into a debt free company by in next 18 months and make it a de-risked company.
As far as the EBITDA is concerned with the current announcements post divestment of petro-chemical business and increase in revenue from the consumer based products (JIO and Reliance retails) it is clear that around 50% of the earning will come from these product and and another half from petro-chemicals. One has to also watch out for what Reliance industries would do with the monetisation of fibre optic assets of JIO as the value of fibre assets is going to kick in at a much higher value than what currently the market is estimating.we can expect more to come as capacity utilisation of jio network is only 20 percent.
Reliance is attracting top global companies like Saudi Aramco and Microsoft, the future business synergies can lead to much betterment for them.Over the period of 40 years RIL has periodically transformed its core business through backward integration. First it was textiles then it was polyester followed by chemicals and then refining and in the past few years a lateral shift has happened with more focus on Retails and telecom as the energy business is in threat due to shift from fossil fuel to renewable energy and Ambani acknowledges that.
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ReplyDeletethe growth of RIL will upgrade the economy of Indian market.RIL is focusing on the global business and @mukeshambani is going to lead from the top.
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