Tag: O2C business

RIL’s reorganisation drive: What’s driving the conglomerate’s strategy?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Reliance Industries Ltd’s (RIL) oil-to-chemical (O2C) business will be spun-off into an independent 100 percent subsidiary which will constitute the refining, petchem and fuel retailing businesses. The company expects the necessary approvals by the second quarter of the next fiscal year. So, what does this reorganization mean for the conglomerate? The company shared its plans in a presentation to investors, the copy of which has been shared with the stock exchanges.

Firstly, there are four clears pillars emerging – O2C, Jio, Retail & Financial Services. The last one is yet to evolve to the size of the others and is likely to see a deeper focus. The recent reorganisation also opens several avenues for the group, especially in M&A, monetisation and global alliances.

More monetisation avenues

The way ahead for RIL as a group will be defined by the strategic alliances and deals to further boost growth potential and the war chest required for it. More monetisation avenues beyond the Aramco deal is possible from other investors as deal talks with the Saudi Arabia major continues. This will lead to value unlocking and cash generation. Entities with core strength are created for attracting investors looking at the specific sectors and strengths.

Jio Platforms and Reliance Retail has seen marquee global investors like Google, Facebook, ADIA, KKR amongst others. Global ambitions cannot be ruled out with the backing of the tech biggies. Many companies in India are eyeing global listing opportunity and this may provide a platform as investors look for returns from their investments.

Key focus areas

As the global opportunities come calling world-class corporate governance standards are the key areas of focus for RIL. The corporatisation of different group verticals with industry veterans taking charge of different group companies has been in the works with promoters taking a step back in execution roles and giving larger direction to the group. Green-tech focus and reducing carbon footprint is also in the same direction of ESG compliance which has taken a centre stage globally.

While the growth path for each of the verticals is getting laid down and path charted out, an eventual succession planning by the promoters can also be morphed as the conglomerate evolves further.

Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

RIL O2C business spin-off into separate arm: Here’s what it means and implications

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Reliance Industries Ltd’s (RIL) oil-to-chemical (O2C) business will be spun-off into an independent 100 percent subsidiary, which will constitute the refining, petrochemical and fuel retailing businesses. Post reorganisation, Reliance will continue with management control.

Watch the accompanying video of CNBC-TV18’s Prashant Nair for more details.

Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

RIL O2C biz spin-off into separate arm a step towards inducting strategic investor: IIFL

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Reliance Industries Ltd (RIL) gains nearly 2 percent after announcing oil-to-chemical (O2C) business spin-off into an independent 100 percent subsidiary, which will constitute the refining, petchem and fuel retailing businesses. Harshvardhan Dole, Vice President Institutional Equities at IIFL, shared his views and outlook.

He believed that this is a step towards inducting a strategic investor into the O2C business. “In our view, when the strategic investor is inducted into this SPV, it should lead to reasonable amount of value unlocking,” he said.

He believed that at current levels, the stock is building in an EV of close to USD 62-63 billion for the O2C business and further value unlocking can lead to upside provided the O2C investor comes in at a valuation, which is much more than this.

From a cash flow generation perspective nothing changes. “Improvement in fundamentals bodes well for the overall cash flow generation. Commodity consumption improvement is giving a tailwind to RIL’s commodity business which should lead to significant earnings growth over the next two years. So as such the cash flow generation from O2C business should continue to remain healthy which should support strategic investor paying a premium for the O2C business,” he said.

The opportunity landscape for renewables is quite significant, he said.

For more, watch the video.

Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Reliance Industries expects approvals for O2C business spin-off by second quarter

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Reliance Industries Ltd expects to get the necessary approvals to hive off its oil-to-chemicals (O2C) business into a separate unit by the second quarter of the next fiscal year, the company said in a presentation to investors on Monday.

The company had initiated the process of spinning off the O2C business at a time when the COVID-19 pandemic caused a slump in fuel demand and weighed on the segment’s recent results.

Reliance, owned by billionaire Mukesh Ambani, will retain full control of the business post-restructuring, the company said in the presentation.

The Mumbai-headquartered conglomerate also announced its aim to work with the O2C business to reduce its carbon footprint and become “net carbon zero” by 2035.

Its vision includes investing in developing renewable energy systems to meet energy demand and to speed up the transition from traditional carbon-based fuels to hydrogen.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow