Reliance Industries Ltd

Reliance Industries Limited (RIL) is an Indian multinational conglomerate

company headquartered in Mumbai, Maharashtra.

Overview
Reliance owns businesses across India engaged in energy, petrochemicals, textiles,
natural resources, retail, and telecommunications. Reliance is one of the most
profitable companies in India, the largest publicly traded company in India
by market capitalization, and the largest company in India as measured by revenue
after recently surpassing the government-controlled Indian Oil Corporation. On 18
October 2007, Reliance Industries became the first Indian company to exceed $100
billion market capitalization.
The company is ranked 106th on the Fortune Global 500 list of the world's biggest
corporations as of 2019. It is ranked 8th among the Top 250 Global Energy
Companies by Platts as of 2016. Reliance continues to be India's largest exporter,
accounting for 8% of India's total merchandise exports with a value of Rs 147,755
crore and access to markets in 108 countries. Reliance is responsible for almost 5%
of the government of India's total revenues from customs and excise duty. It is also
the highest income tax payer in the private sector in India.[10] In 2019, Reliance
Industries become the first Indian firm to cross Rs 9 lakh crore market valuation
mark.[11] It has become the first ever Indian company to cross Rs 10 lakh crore
market capitalization.
 Shareholding Pattern

1. Promoters have nearly 49% stake in RIL.This is one of the mail reasond why
RIL is so successful. The personal interest of the promoters combined with
their business acumen has created a fortune for both them and their
investors.
2. Foreign Institutions and Direct Investors also hold nearly 23% stake in RIL.
FPI’s and FDI’s perform due diligence on such companies before
investment. Moreover RIL has underwent more FII investments from big
firms like KKR, General Atlantic etc. this will help RIL to both reduce their
debt and improve RIL’s operations due to inflow of business expertise and
shareholder activism.
3. General Public also has nearly 8% stake in RIL. 8% stake by general public
in a company of rs 10 Lakh Crore Market Cap is really a big deal. This
shows the level of confidence of people on RIL.
 Management

RIL is a very professionally managed company having various business veterans

on its team.

1. Mukesh Ambani - Mr. Mukesh D. Ambani (DIN 00001695) is a Chemical

Engineer from the Institute of Chemical Technology, Mumbai (erstwhile the
University Department of Chemical Technology, University of Mumbai). He
pursued an MBA from Stanford University in the US. He has been on the
Board of Reliance since 1977. He initiated Reliance’s backward integration
journey – from textiles to polyester fibres and further onto petrochemicals
and petroleum refining, and going upstream into oil and gas exploration and
production. He created multiple new world-class manufacturing facilities
involving diverse technologies that have raised Reliance’s petrochemicals
manufacturing capacities from less than a million tonnes to about 21 million
tonnes per year.

In the late nineties, Mr. Mukesh Ambani spearheaded the creation of the world’s
largest grassroots petroleum refinery at Jamnagar in Gujarat, India, with a capacity
of 660,000 barrels per day (33 million tonnes a year), and integrated it with
petrochemicals, power generation, port and related infrastructure. Further, he
steered the setting up of another 580,000-barrels-per-day refinery next to the first
one in Jamnagar. With an aggregate refining capacity of 1.24 million barrels of oil
per day at a single location, Jamnagar has become the refining hub of the world.

He also led Reliance’ development of infrastructure facilities and implementation

of a pan-India organized retail network spanning multiple formats and supply chain
infrastructure. Today, Reliance Retail is the largest organised retail player in India.
He has created global records in customer acquisition for Jio, Reliance’ digital
services initiative.
 2. Nita Ambani - Nita M. Ambani (DIN 03115198) is a Commerce Graduate
from Mumbai University and a Diploma Holder in Early Childhood
Education.
Mrs. Ambani is a businesswoman, educationist, philanthropist and a strong
proponent of sports. She is the Founder & Chairperson of Reliance Foundation,
which has impacted the lives of over 26 million people across India, through its
initiatives in Rural Transformation, Health, Education, Sports for Development,
Disaster Response, Arts, Culture & Heritage and Urban Renewal.

3. Hital Meswani - Mr. Hital R. Meswani (DIN 00001623) is a Management &

Technology graduate from the University of Pennsylvania (UPenn) in the
USA. He received a Bachelor of Science Degree in Chemical Engineering
from the School of Engineering and Applied Sciences, UPenn, and a
Bachelor of Science Degree in Economics from the Wharton Business
School. He joined Reliance Industries Ltd. (RIL) in 1990 and is the son of
Mr. Rasiklal Meswani, one of the Founder Directors of the company.

SWOT Analysis

We will now perform SWOT Analysis on Reliance Industries Ltd –

The Strengths of RIL are –

1. M&A Activities – RIL has a track record of successfully acquiring

complimentary firms to streamline operation and expand its base.
2. Presence – RIL has a presence in almost every sector in India , namely
Telecom, Oil and gas , Retail , Healthcare etc. Moreover Reliance ‘s Culture
as helped them to achieve excellence in every sector that they have forayed
into.
3. Brand Name – RIL’s brand name is very strong and they enjoy very strong
customer loyalty. This will massively help the company in the long run.
 4. Capex Spending – RIL invests heavily in capex which has helped them to
grow over the years.
5. Refining Efficiency – RIL’s Jamnagar refinery has the best technology in the
world and has the largest capacity in the world. This has made RIL’s
Jamnagar facility the hub of refiinig.

The Weaknesses of RIL are –

1. High Debt – RIL has a huge debt on them. Although recently RIL has
received many investments from FII’s which will help them to lower their
debt by quite a hefty amount.
2. Declining production in Exploratory Blocks - RIL’s gas production from
two of its majorplants, KG-D6 project and Tapti Fields is decreasing due to
various natural and operational challenges. A decrease in production affects
supply and operational margins.
3. Recent Divesting and Relinquishing activities -RIL recently divested in som
e of its production sharing contracts in Dubai, Yemen etc. This affects global
Expansion plans for RIL.

The Opportunities of RIL are –

1. Investing in attractive international oil and gas destinations: In 2015, RIL

won the bid for Myanmar Offshore block with 96% interest. RIL should
continue making such investments to expand its operations globally.
2. CBM as unconventional natural gas: CBM is a natural gas extracted from
coal beds. RILhas two CBM blocks under it and is set to utilise CBM as the
unconventional natural gas resource.
3. New offers in Reliance Jio: Mukesh Ambani’s pet project Reliance Jio has
already become one of the nation’s largest telecom networks. Reliance Jio
needs to bring out new offersand a retention policy to retain the customers
who might as well drop Jio for another offer
from other telecom giants.

The threats faced by RIL are –

1. In Retail, RIL faces stiff competition from the Future group, D-Mart etc.
Such competition limits market share.
2. In telecom, Jio is up against the giants of the industry like Vodafone, Airtel
and Idea.These companies are looking for a chance to regain customers lost
to Jio.
3. Reliance Jio free offers ending: Reliance Jio has provided the customers
with free data and calling offers in its introductory package and has extended
the offers a few times. Now, these offers are about to end very soon. This
will test the retaining capacity of
Reliance Jio.

Competitive Analysis
The top Competitors of RIL are ONGC and Indian Oil.

1. Revenue – IOC has higher revenue than both RIL and ONGC.
2. COG – IOL has highest COG followed by RIL and ONGC.
3. Gross Profit – ONGC has highest gross profit followed by RIL and Indian
Oil.
4. Net Income – RIL has highest Net Income , followed by ONGC and IoL.
Conclusion
 Conclusion

Reliance has come a long way from the day of it’s inception. The business
acumen of the management. They have forayed into sectors that are profitable
and have always changed the game.
Due to their strong “War Chest” , they have been able to fight the wars quite
well.

Recently , when the markets fell nearly by 25% , RIL is at present , at its
original level. All thanks to its business acumen,.

RIL has a very bright future ahead and it’s competent management will help the
business to evolve.