2.

1 History of Reliance Industries:

Reliance Industries is India’s largest private sector company, generating revenue of $19.97 billion, or
more than 3% of India’s total GDP (Gross Domestic Product). Founded as a textile company, Reliance
company has successfully completed a backward integration strategy that has transformed it into India’s
largest private sector petrochemicals company, and number two overall (behind state owned India Oil).
Reliance’s petrochemicals division is fully integrated and includes exploration and production; refining
(the company has built one of the world’s largest and most modern refinery complexes at Jamnagar in
Gujarat); marketing through a chain of more than 1000 service stations; and the production of
petrochemicals, including polymers, polyesters, polyester intermediates, and others. These chemicals
are used to support Reliance’s continued textile operations, which focus particularly on the production
of polyester fabrics. The company has become the world’s leading polyester manufacturer, with
production levels topping 25 million meters per year. The company’s textile range includes other fabrics,
such as acrylics, and finished garments.

Reliance Industries represents the continuation of India’s greatest corporate success story since the
country’s independence.

Founded by Dhirubhai H Ambani in 1958, Reliance grew to include holdings in energy production and
distribution, telecommunication and capital financing. After a public feud between Mukesh D Ambani
and younger brother Anil, these operations were split off into a new company controlled by Anil
Ambani. Reliance Industries is listed on Mumbai Stock Exchanges. Mukesh Ambani is company chairman
and managing director.

Rags in 1958:

Dhirajlal Hirachand Ambani (Dhirubhai was a nick name) was born in a lower middle class school
teacher’s family in Chorwad, in 1932. Instead of becoming a teacher himself, the young Ambani
travelled to the port city of Aden at the age of 16 (because the family could not afford to send him a
university). There, Ambani began to work as a clerk pumping gas at a service station. Ambani remained
in Aden for 10 years, rising to become Bumrah Shell’s marketing manager. By then, Ambani had begun
to dream of founding his own business.

Ambani quit Bumrah Shell and for a time worked in the insurance field. In 1950’s, the political situation
in Aden had become increasingly unstable. In 1958, therefore, Ambani decided to return to India and
start up a new business as an exporter of Indian goods to Aden. Finding housing for his young family in a
Mumbai slum, Ambani at first rented office space, or rather a desk, for two hours a day. Initially,
Ambani’s exports included spices as well as fabrics.

Textiles, starting with textile yarn’s which Ambani sold to textile manufacturers, provided Ambani with
his strongest sales, and quickly became the company’s focus. Ambani also rapidly proved himself adept
at negotiating the intricate bureaucracy of the socialist Indian government. In particular, Ambani was
able to develop a network of relationships with the country’s political leaders, including Prime Minister
Indira Gandhi. In this way, Ambani was able to develop a thriving business importing and exporting
nylon, rayon, and polyester.
In the mid 1960’s, Ambani developed still greater ambition, became determined to enter textile
manufacturing. The company set up its first factory in 1966, placing him in competition with his own
customers. Success in the new venture came quickly, with the launch of the highly popular Vimal fabric
brand. By the end of the decade, Ambani operated four factories. Part of the company’s success came
from its determination to use only the most modern, highly efficient production equipment. In this way,
the company easily outpaced competitors, which relied on equipment often decades old.

Into the early 1970’s, however, India’s economy remained dominated by a handful of families; between
them, and under the auspices of the Indian government, they controlled virtually every industry. This
included textile industry, whose distribution side soon an obstacle to the growth of Ambani’s fabric
sales. In response, Ambani became determined to set up his own distribution arm, which later included
not only the sale of raw fabrics, but also company’s own clothing fashion.

Public Offering Revolution in 1977:

The “old boy” network that dominated India’s Political, Industrial, and financial circles also meant that
Ambani had to look elsewhere for investment capital to back his growth ambition. Cut off from funding
from the Indian government, Ambani instead took the revolutionary step of turning to the stock market.

In 1977, Ambani launched Reliance Textile Industry’s Initial Public Offering (IPO). The IPO, of 2.8 million
shares, raised $1.8 million, and was considered among the largest in India at the time. By circumventing
the traditional reliance on the state for capital investment, Ambani sparked a revolution in India, and
was widely credited for setting the stage for the country’s emergence as a major regional industrial
centre.

Ambani’s deftness at working the Indian bureaucracy enabled him to take advantage of country’s arcane
licence system, which also imposed stiff import duties, virtually assuring licence-holders of a captive
market. In 1981, for example, Ambani received a license to construct a factory in Patalganga to produce
polyester filament yarn. Soon after the factory launched production, the Indian government sharply
raised import duties on polyester yarn.

The Patalganga plant completed its second phase in 1985. The following year, the site added a new
polyester staple fibre plant as well.

In the early 1980’s Ambani was joined by sons Mukesh and Anil. Both had been sent to the United States
for the education and, upon their return to India, played a prominent part in implementing Reliance’s
next phase of growth. Just as the company had moved from the sale of textiles to their manufacture,
Reliance became determined to continue its backward integration in order to produce the chemicals
from which the textile yarns were made.

The company’s new strategy led it to enter the petrochemicals industry, Building its first plant for the
production of purified terephthalic acid in in 1986. In that year, following a stroke that left Dhirubhai
Ambani partially paralyzed, the company’s day-to-day direction was taken over by Mukesh and Anil.
Their father remained chairman and the guiding hand of the business’s growth until his death in 2002.
The following year, the company added a unit for production of linear alkyl benzene, followed by the
opening of a paraxylene plant in 1988. The company then began developing a new petrochemicals
complex at Hazira, which began production of vinyl chloride monomer and polyvinyl chloride. In this
way, the company developed market leadership both in polyesters and in polymers. By 1992, the
company had launched production of high-density polyethylene at the Hazira complex as well.

Indian Petroleum Giant at the start of the 21st century:

Reliance’s vertical integration strategy naturally led to an interest in extending its operations to
petroleum refining, and even to exploration and production. Yet these sectors remained tightly under
state control, following the nationalisation of the Indian Oil Industry in 1976 amid the global oil crisis.
Although the state-owned oil companies were able to meet domestic demand through the 1980s, by the
early 1990s, the country’s existing oilfields were showing signs of depletion. At the same time, demand
had been rising steadily, yet the oil companies, propped up by state subsidiaries, were too strapped for
cash to invest in further exploration efforts. An initial attempt to liberalise the production and refining
sectors failed, however, amid strong union protests.

In the meantime, Reliance made preparations for its move into the petroleum industry. In 1991, the
company set up a new subsidiary, Reliance Refineries Private Limited, clearly signalling its objectives.
The subsidiary later changed its name to Reliance Petroleum Limited, and in 1993 launched a public
offering, which at that time was India’s largest ever IPO. While Reliance affirmed its plan to construct
India’s largest oil refinery, the company began developing its petroleum production marketing and
distribution operations, including a network of some 1000 service stations.

Reliance continued to pioneer financing channels in India. In 1993, for example, the company became
the first Indian company to raise capital on the foreign market, Through a Global Depositary Receipts
(GDR) issue in Luxembourg. The company completed a second successful GDR issue in1994. The
company used the new capital in part to expand its petrochemicals wing, building the world’s largest
multi-feed crackers at the Hazira site. The company also added production plant for monoethylene
glycol, polyethylene, and purified terephthalic acid. The new units launched production in 1998.

Reliance’s opportunity for entry into petroleum refining came in 1997, when the Indian oil industry
reached a state near collapse. Unable to fund further exploration operation, and lacking the capital to
expand its existing operation, the government was forced to liberalise the sector. In that year, Reliance
announced a plan to build one of the world’s largest and most modern petroleum refining complexes in
Jamnagar, Gujarat at a cost of some $6 billion. The government agreed to the plan, and granted the
company the right to import petroleum directly, rather than going through Indian oil, which helped
Reliance greatly drive down operating costs.

Constructed in record time, the Jamnagar site was commissioned in 1999. The site’s production capacity
was double that of any other Indian refinery and ranked among the top five in the world. The addition of
new facility also placed Reliance at the top rank of the country’s private sector companies. In 2002,
Reliance Petroleum was merged into Reliance Industries, which then became one of the country’s top
three companies, including state owned entities.
Break up in 2006:

Dhirubhai Ambani died in 2002, and the Ambani brothers took over as heads of the company. In that
year, the company increased its dominance of the country’s petrochemicals sector through its
acquisition of main private-sector rival Indian Petrochemicals Corporation. Also in 2002, Reliance
launched a diversification effort, targeting the telecommunications sector, especially the fast-growing
cellular phone market. Reliance set up its own phone service, Reliance Infocomm, in that year.

Yet the petroleum industry remained the company’s major growth focus. In 1999, the Indian
government auctioned off 25 blocks for exploration; bids were given in the form of royalty percentage
offers. Reliance won 12 of the blocks and promptly set in place its own team of exploration experts,
backed by oilfield services from Halliburton and Schlumberger. Reliance’s investment quickly paid off
with the discovery of natural gas reserves estimated at some 14 trillion cubic feet, the largest natural gas
field discovered in India in decades, in Krishna-Godavari Basin in the Bay of Bengal. In 2004, the
company struck again, locating a new gas field in the Bay of Bengal, off the Odisha coast.

Buoyed by its successful exploration efforts, Reliance unveiled an ambitious expansion program for the
second half of the 2000s. The company’s included a $6 billion extension of the Jamnagar site, doubling it
in size and making it the world’s largest refinery by 2009. The company also announced that it intended
to spend $10 billion on further oil exploration efforts, targeting the international market. In this way, the
company hoped to increase its production tenfold by the end of the century. At the other end of the
petroleum market, the company launched a $1.5 billion expansion of its Reliance gas station chain, with
the goal of 6000 stations. The company also expanded internationally, becoming the world’s leading
manufacturer of polyester yarn with the acquisition of Germany’s Trevira. In addition, the company
boosted its telecommunications wing, acquiring U.K based FLAG Telecom, an operator of a 50000-
kilometer underwater fiber-optic cable network.

In the meantime, rising tensions between Mukesh and Anil came to a head in late 2005, when a long-
simmering disagreement over company strategy broke out into an open and highly publicized feud. In
the end, a truce was brokered by the brother’s mother, who proposed a break up of Reliance industries
into two roughly equal components. Mukesh Ambani remained as head of the company’s petroleum,
petrochemicals, and textile operations. And Anil Ambani regrouped the company’s telecommunications,
energy, capital finance, and other operations into a new company. The company’s break up took place
in 2006. As a result, Reliance Industry emerged as a focused and highly integrated petroleum and
petrochemicals challenger to the global heavyweights.
2.2 Principal Subsidiaries:

Reliance Industries Investment and Holdings Ltd.

Reliance Infrastructure Limited.

Reliance Middle East DMCC (U.A.E).

Reliance Netherlands B.V.

Reliance Petroleum Limited.

Reliance Retail Limited.

Reliance Strategic Investments Limited.

Reliance UK Ltd. (50%)

Reliance Ventures Ltd.

2.3 Principal Competitors:

Indian Oil Corporations Ltd.

Hindustan Petroleum Corporations Ltd.

Bharat Petroleum Corporations Ltd.

Indian Petrochemicals Corporations Ltd.

Mangalore Refinery and Petrochemicals Ltd.

Kochi Refineries Ltd.

Chennai Petroleum Corporations Ltd.

Parker Agrochem Exports Ltd.

2.4 Additional Details:

It is a public company.

It was incorporated in the year 1958.

It has approximately 236560 employees (2021)

Sales: INR 539238 Crore

Market Capitalisation: INR 1315998 Crore

CSR Activity: INR 1140 Crore

Net worth: INR 587999 Crore

2.5 Management:

Shri Mukesh D Ambani

Chairman and Managing Director

Director since 1977

The face of emerging India’s enterprising spirit; led the creation of world’s largest petroleum refinery,
one of the most expensive 4G networks and India’s largest retail foot print

Shri Yogendra P Trivedi

Non-Executive Director

Director since 1992

Practising senior advocate at Supreme Court of India; served on the board of PSU banks; associated with
leading industries and trade bodies

Dr. Ragunath A Mashelkar

Non-Executive Director

Director since 2007

An eminent scientist and National Research Professor; Awarded Padmashri, Padmabhusan and
Padmavibhusan

Shri Raminder Singh Gujral

Non-Executive Director

Director since 2015

Former Financial Secretary, Government of India, and former Chairman of NHAI; also serves on the
board of various Reliance and Adani Group of Companies
Smt. Nita M Ambani

Non-Executive Director

Director since 2014

A businesswoman, educationist, and philanthropist, Founder and Chairperson of Reliance Foundation

Prof. Dipak C Jain

Non-Executive Director

Director since 2005

A distinguished scholar and teacher; served as a dean of some of the world’s leading management
schools; currently president of China Europe International Business School

Shri Adil Zainulbhai

Non-Executive Director

Director since 2013

Former Chairman of McKinsey & company, India; Chairman of Quality Council of India and Chairman of
the Capability Building Commission of India; serves on the boards of various Reliance companies, Larsen
&Toubro, and Cipla

Dr. Shumeet Banerji

Non-Executive Director

Director since 2017

Former founding CEO of Booz & company; currently leads an advisory and investment firm specialising
in developing early-stage companies

Smt Arundhati Bhattacharya

Non-Executive Director

Director since 2018

A banker and Chairperson of India’s largest bank, SBI; currently leads Indian operations of Sales force, a
global leader in customer relationship management software
Shri Nikhil R Meswani

Executive Director

Director since 1986

One of the Founder Directors, Instrumental in making Reliance a global petrochemicals leader; serves on
Board of Trade, Ministry of Commerce, and National Council of CII

Shri P M S Prasad

Executive Director

Director since 2009

A career spanning almost four decades with Reliance across fibre, petrochemicals, refining, marketing,
and exploration & production business

Shri K V Chowdary

Non-Executive Director

Director since 2019

Former Central Vigilance Commissioner, Former Chairman of CBDT and Former Advisor of Department
of Revenue

Shri Hital R Meswani:

Executive Director

Director since 1995

Leads several functions from refining to Human Resources; involved in all mega initiatives of Reliance
including the Hazira petrochemicals complex and Jamnagar refinery complex.

Shri Pawan Kumar Kapil:

Executive Director

Director since 2010

Led the commissioning and start-up of the Jamnagar complex; spearheaded various large scale projects
in a career spanning over five decades in the petroleum refining
2.6 Segments of Reliance:

The company works under different segments. Such as:

Retail

Digital Services

Media & Entertainment

Oil to Chemicals

Oil & Gas Exploration and Production

2.6.1 Retail Segments

Reliance Retail delivered a resilient performance against the backdrop of an unprecedented and
challenging operation environment, arising from the COVID 19 pandemic situation that emerged at the
start of the year. The business delivered gross revenue of and challenging operation environment,
arising from the COVID 19 pandemic situation that emerged at the start of the year. The business
delivered gross revenue of INR 153818 crore. At an EBITDA of INR 9842 crore for financial year 2020-21,
the business posted its all-time high profit.

2.6.2 Reliance Media and Entertainment:

Consolidated EBITDA of the business rose 29% y-o-y to INR796 crore despite the pandemic impact
dragging revenue down by 12% y-o-y. EBITDA margin rose to a highest ever-17%, having improved y-o-y
for three years continuously. Broad-based cost controls across businesses, growth in annuity-style
revenue streams and content cost renegotiation have boosted profitability. PAT jumped by 9x y-o-y to
INR 547 crores.

2.6.3 Digital services:

The business recorded a revenue of INR 90287 crore, as against INR 69605 crore in the previous year,
with year-end subscribers base at 426.2 million. Reliance jio reported strong financial performance for
the year. Segment EBITDA was at INR 34035 crore for the year, as against INR 23348 crore in the
previous year.

2.6.4 Oil to Chemicals:

Revenue for O2C business declined by 29.1% to INR 320008 crore on account of lower volume and price
realisation across key products. Sharp demand contraction in the first half of the year impacted growth
for the year. The price realisation was lower due to decline in average crude and feed stock prices.
Bruent crude prices for the year averaged at $44.3/bbl. versus $61.1 /bbl. in the previous year, a decline
of 27.5%. EBITDA for the year was lower with weak demand environment in 1H FY 2021. Gradual easing
of lockdowns and improvements in economic activities during 2H FY 2021 supported demand and
margin recovery for transportation fuels and downstream chemicals.
2.6.5 Oil & Gas E&P:

Revenue for the oil and gas business declined by 33.4% y-o-y to INR 2140 crores, primarily due to lower
volumes from conventional fields and overall lower commodity price realisation. EBITDA for the year
declined by 26.9% to INR 258 crores. Price realisation for Coal Bed Methane gas for the year was lower
by 40% at $4.27/MMBtu (GCV). Realisation in the US Shale business also declined by 27% to 2.07/MCFe.
Lower conventional volumes due to expiry of Panna Mukta production sharing contract in December
2019 and cessation of production from D1D3(KG D6) field in February 2020.