NIFTY started the day at 19,298 with a gap-up of 32 points. Initially, the index faced a small resistance near the 19,300 level and fell till Friday’s low. Then, it gradually moved to 19,360 levels (more than a 115-point rally), where it took resistance. The index slowly fell back to 19,300 levels over the last 1½ hours (during Reliance’s AGM). Nifty closed at 19,306, up by 40 points or 0.21%.
BANK NIFTY (BNF) started the day at 44,253 with a small gap-up of 22 points. After the initial consolidation, Bank Nifty moved up nearly 410 points from the intraday low of 44,200 to 44,610— crossing the important resistance of 44,500. BNF closed at 44,494, up by 263 points or 0.6%.
All indices except Nifty IT (-0.46%) and Nifty FMCG (-0.23%) closed in the green. Nifty Realty (+0.94%) moved up the most.
Major Asian markets closed mixed. European markets are currently trading in the green.
Today’s Moves
PowerGrid (+2.69%) was NIFTY50’s top gainer on the back of strong volumes.
Indiabulls Housing Finance (+10.99%) surged. Recently, the company repaid ₹2,232 crore of external commercial borrowings (ECBs) raised in 2018 from foreign banks.
Reliance (-1%) was NIFTY50’s top loser. The company held its Annual General Meeting today. The next generation of Ambani family – Isha, Akash and Anant Ambani – will join the board of RIL. Mukesh Ambani will remain as the Chairman for 5 years.
Brightcom Group hit a 5% lower circuit after the Enforcement Directorate (ED) carried out multiple searches at various locations of the company.
Markets Ahead
Markets took support from the lows created on Friday and gave a small retracement. As the markets were under huge selling pressure, there was not enough strength to see a quick up-move. But the indices are holding the low levels.
Nifty: The index has closed above the important resistance of 19,300. That level can now act as immediate support. But the major support will be the 19,240 zone. And if there’s a gap down or flat opening below 19,300, 19,240 levels will be tested again, and the index might even fall to 19,100 and 18,900 levels.
Meanwhile, the immediate resistance to look out for will be today’s high of 19,360. A breakout from there can give us targets of 19,420 and 19,475.
Bank Nifty: The index couldn’t close above 44,500, but the buying strength is still there. If there’s a gap-up opening or flat opening followed by an up-move, the index can move further up to 44,950 levels. In that case, the support zone to watch will be 44,500 levels. If there’s a gap down opening or negative movement after opening, BNF can fall to 44,200 levels (which was today’s swing and there’s also a trendline support drawn from last week’s low).
Markets have not turned bullish completely and major resistance of 19,500 in Nifty and 45,000 in Bank Nifty have to be crossed to expect a reversal. Till then, the indices can be sold in every uptick.
Fin Nifty: Being Fin Nifty expiry tomorrow, the important support zone to watch is 19,500-520 levels. The important resistance is 19,900. A breakout from today’s high of 19,800 will take the index to 19,900 and eventually to 20,000 levels. A breakdown from 19,740 levels will take the index down to 19,600 levels and can be choppy in this zone.
What levels are you watching out for FIN NIFTY expiry? Let us know in the comments section of the marketfeed app.
marketfeed wishes all our readers a VERY HAPPY ONAM! 🌼
Here are some of the major updates that could move the markets tomorrow:
Mukesh Ambani says Indian economy to grow 13-fold to $40 trillion by 2047
Reliance Industries Ltd’s Mukesh Ambani said India is likely to become a $40 trillion economy by 2047— a 13-fold jump from its current size. “Three game-changing revolutions will govern India’s growth in the decades ahead: the clean energy revolution, the bio-energy revolution and the digital revolution,” he added. Ambani said India will witness an unprecedented explosion in economic growth and opportunities.
Bharti Airtel’s Nxtra starts construction of its largest data centre in Kolkata
Nxtra Data, a subsidiary of Bharti Airtel Ltd, has started the construction of its new hyper-scale data centre in Kolkata. The company will invest ₹600 crore in the development of the facility. The data centre will serve the markets of east & north-east regions in India and the SAARC countries and fulfil the growing needs of enterprises and global cloud players.
Reliance Jio Infocomm added 7.24 lakh wireless subscribers in September 2022, taking its total user count to 42.68 crore. Bharti Airtel gained 4.12 lakh subscribers in Sept, and its total subscriber count increased to 22.50 crore. Meanwhile, Vodafone Idea (Vi) lost 40.11 lakh subscribers, and its total user count declined to 12.32 crore. India’s total mobile subscriber base fell by 36 lakh in September.
Steel Strip Wheels to establish EV joint venture with Redler Tech
Steel Strip Wheels Ltd (SSWL) has signed an agreement to form a joint venture (JV) with Israel-based Redler Technologies for the development, manufacturing, and sales of motion controllers for electric vehicles in India. The association will synergise SSWL’s manufacturing capability, large consumer access, and strong Indian presence with Redler Tech’s access to advanced technology.
Bajaj Finance raises deposit rates for third time in 3 months
Non-banking finance company (NBFC) Bajaj Finance has raised deposit rates for the third time in three months to boost liabilities. It has raised fixed deposit rates by up to 25 basis points for tenures between 12-23 months. Several lenders like State Bank of India, HDFC, and Ujjivan Small Finance Bank raised deposit rates multiple times since April when the Reserve Bank of India started rising interest rates to curb inflation.
Glenmark Pharma signs settlement pact with Pfizer for cancer drug
Glenmark Pharmaceuticals Ltd has entered into a settlement agreement with Pfizer Inc regarding Axitinib Tablets. The product is the generic version of Pfizer’s Inlyta tablets, used to treat kidney cancer. According to IQVIA data, Inlyta tablets achieved annual sales of around $644.5 million for the 12 months ended September 2022.
India’s domestic air traffic rises 27% in October: DGCA
Data released by the Directorate General of Civil Aviation (DGCA) showed that Indian airlines carried 1.14 crore passengers in October 2022, up 27% YoY. Domestic air traffic rose 10% compared to the previous month. IndiGo’s market share fell from 58% in Sept to 56.7% in October. SpiceJet and Akasa Air had a market share of 7.3% and 1.4%, respectively, in Oct.
Dr. Reddy’s Labs to face antitrust litigation in US
An antitrust litigation was filed against several generic pharmaceutical companies, including Dr. Reddy’s Laboratories Ltd, Celgene, and Bristol Myers Squibb in the US. A complaint was filed on Nov 18, 2022, in the District of New Jersey, and the pharma companies have been named defendants. The complaint alleges that the defendants improperly restrained competition and maintained a shared monopoly in the sale of the Revlimid brand through their respective settlements of patent litigation.
Vedanta declares third interim dividend of ₹17.5 per share
Vedanta Ltd’s board approved the third interim dividend of ₹17.5 per share for the financial year 2022-23. The dividend will amount to ₹6,505 crore. The company has fixed November 30, 2022, as the record date for the dividend. Vedanta paid its first interim dividend of ₹31.5 per equity share in May 2022 and the second interim dividend of ₹19.5 per share to shareholders in July.
A recent report from Forbes showed that the total number of billionaires in India rose to a record 166 in the financial year 2021-22 (FY22). The combined net worth of these billionaires grew 26% to 750 billion! Their business empires have played a significant role in the economic growth of our nation. In this article, meet the top 10 richest Indians!
Gautam Adani
Gautam Adani, chairman of the Adani Group, has a net worth of $122.3 Billion (~Rs 9.31 lakh crore). With a meteoric rise in shares of group firms, Adani’s wealth grew by Rs 6,000 crore every week over the past year! He is currently the sixth richest person in the world!
The Adani Group has interests in the infrastructure, logistics, power generation & transmission, and real estate sectors via Adani Enterprises, Adani Ports, Adani Green Energy, Adani Transmission, and other group firms. The group also operates some of the major airports in our country. Adani has announced plans to become the world’s largest producer of green energy. They will invest up to $20 billion in renewable energy projects over the next decade.
Mukesh Ambani
Mukesh Ambani is the chairman of Reliance Industries Ltd (RIL), India’s largest company. RIL’s subsidiaries are involved mainly in petrochemicals, oil & gas, telecom (Jio Platforms), and retail (Reliance Retail). Reliance is also pivoting into green energy. The company aims to invest $80 billion over the next 10-15 years in renewable energy.
With a net worth of $98 Billion (~Rs 7.46 lakh crore), Ambani is the 10th richest person in the world!
Shiv Nadar
Shiv Nadar co-founded HCL Technologies, one of India’s largest IT companies. He is also known for his philanthropic activities. In July 2020, Nadar stepped down as chairman of HCL Technologies, handing over the position to his daughter, Roshni Nadar Malhotra. He is currently the Chairman Emeritus and strategic advisor of HCL Tech.
Shiv Nadar’s net worth stands at $28 Billion (~Rs 2.12 lakh crore).
Cyrus Poonawalla
Also known as the ‘Vaccine King’, Cyrus Poonawalla is the world’s richest billionaire in the healthcare industry. His company, Serum Institute of India (SII), manufactured the Covishield vaccine last year. SII produces over 1.5 billion doses of vaccines per annum, including those for measles, polio, and flu. Poonawalla’s assets include a majority stake in listed financial services firm Poonawalla Fincorp.
Cyrus Poonawalla’s net worth stands at $26 Billion (~Rs 1.98 lakh crore).
Radhakishan Damani
Veteran investor and founder of Avenue Supermarts (popularly known as DMart), Radhakishan Damani has a net worth of $20 Billion (Rs 1.52 lakh crore). His company operates over 250 DMart stores across India. Also known as the ‘Retail King’, Damani holds stakes in VST Industries, India Cements, and Tata Trent.
Savitri Jindal & Family
The Jindal Group is chaired by Savitri Jindal, widow of founder Om Prakash Jindal. Their four sons run the business empire now. The conglomerate has interests in mining, power, industrial gases, cement, and steel manufacturing. The group’s listed firms include Jindal Steel & Power, Jindal Steel, JSW Steel, and JSW Energy.
Savitri Jindal and her family have a net worth of nearly $20 Billion (~1.52 lakh crore).
Lakshmi Mittal
Lakshmi Mittal serves as the executive chairman of ArcelorMittal, one of the world’s largest steel and mining companies in terms of output. The company operates steel manufacturing units in 17 countries. Even though he is based out of London, Mittal holds an Indian passport. His net worth stands at $18 Billion (~Rs 1.37 lakh crore).
Kumar Mangalam Birla & Family
Kumar Birla is the fourth generation head of the Aditya Birla Group. The group companies include UltraTech Cement, Hindalco, Aditya Birla Fashion & Retail, Aditya Birla Capital, and even the failed Idea Cellular. Birla’s net worth stands at $17 Billion (Rs 1.29 lakh crore).
Dilip Shanghvi
Dilip Shanghvi founded Sun Pharmaceutical Industries, one of India’s most valuable pharma companies having significant sales across the world. He grew Sun Pharma through a series of acquisitions, including the 2014 purchase of rival Ranbaxy Laboratories for $4 billion. He has personally invested in renewable energy and oil & gas projects. His net worth stands at $16.2 Billion (~Rs 1.23 crore).
Uday Kotak
Uday Kotak is the executive vice-chairman and managing director of Kotak Mahindra Bank. His company is now among India’s top four banks in the private sector. The company offers banking products and financial services for corporate and retail customers in the areas of personal finance, investment banking, life insurance, and wealth management. Kotak’s net worth stands at $14.7 Billion (Rs 1.12 lakh crore).
Source: Forbes Real-Time Billionaires List (as of 13/4/2022)
On February 8, 2022, Gautam Adani, the chairman and founder of the Adani Group, surpassed Mukesh Ambani to be the Richest Indian and the Richest Asian according to Bloomberg Billionaires Index. A day later, on February 9, 2022, Mukesh Ambani gained his position back, where his valuation stood at $89.2 billion against Adani’s $86.3 billion.
Gautam Adani has come a long way in being at par with Mukesh Ambani, India’s richest man. Adani Group stocks have benefited quite a lot from the Covid-19 induced bull run that favoured Gautam Adani’s valuation. In this piece, we get into the lives of the two wealthiest persons in India, Gautam Adani and Mukesh Ambani.
COVID Bull Run, High Promoter Holding Behind Adani’s Wealth?
Adani operates in a bundle of verticals like ports, power, and green energy. It has recently forayed into the airports business taking control of 7 airports under the Public-Private Partnership model. The company’s FMCG arm Adani Wilmar recently debuted on the stock market with a premium valuation. It was after Adani Wilmar’s IPO that Gautam Adani became the wealthiest person in India for a day.
The COVID-19 induced pandemic has contributed immensely to Gautam Adani’s valuation. While most listed Adani companies have posted fair (not impressive) growth in profit margin or revenue, their valuation has broken the ceiling. The rise in share prices in Adani Group companies is given below.
Adani Group Company
% Increase In Share Price In 2 Years
Adani Total Gas Ltd.
+957.78%
Adani Green Energy Ltd
+803.01%
Adani Enterprises Ltd.
+619.24%
Adani Transmission Ltd.
+497.61%
Adani Power Ltd.
+107.81%
Adani Ports & Special Economic Zone Ltd.
+93.4%
Source: Trendlyne
Looking at the table given above we can see the HUGE growth in the share price of Adani stocks. Had you invested Rs 5,000 two years ago in each of the six Adani companies shown above, it would have turned into Rs 1,83,942 by now. A 6X return on an investment of Rs 30,000.
Speaking of Gautam Adani, most of the Adani Group companies have a very high promoter holding. A promoter is a person that sets up a business, brings in the capital, raises investment, and makes key decisions in the company. An average Adani company has a promoter shareholding of around ~75%. Seemingly, Gautam Adani likes to keep it ‘in the house’, most of the ‘promoter holding’ is either in his name or a family member’s name or trust/company that is owned by either Adani or a close family or associate. The person most likely to benefit from an increase in share price is the founder itself.
Can Adani Pit Against Ambani?
Ambani and Adani have decided to keep the reins of the business within the family. Both companies have extremely complicated, intricate, and peculiar company structures. While Reliance had a legacy of Ambani’s father Late Dhirubhai Ambani, Adani is the first monarch of his conglomerate.
While Mukesh Ambani is hooked on new economy businesses like 5G, Virtual Reality, IoT, Communications, Information Technology, etc, Adani continues to expand his ‘old economy’ businesses like petroleum, ports, special economic zones, power transmission, power generation, etc. New economy businesses raise higher valuations because of innovation and the discovery of technology.
While both companies have grown at a similar pace, have similar operating structures and country-wide influence, there is one thing that makes the odds favour Ambani. While Mukesh Ambani is on verge of making Reliance Industries Net-Debt Free, Adani is running a debt-fuelled expansion plan. As of October 2021, Reliance Industries (RIL) has more Cash and Reserves than the debt that it owes, the Adani Group on the other hand owes nearly Rs 155 lakh crore in debt. In general, Reliance Industries has always used the sale of equity to raise funds combined with some bonds and rights issues. On the other hand, Adani has fuelled its expansion mostly through debt.
Adani has seven of its subsidiaries listed on the stock market, and the recent bull run has benefitted the group. Governments across the world have now started taking excess cash out of the system to battle rising inflation. Eventually, the money could make its way out of the stock market, adversely affecting Gautam Adani’s portfolio.
Who do you think can sustain their positions in the long term? Can Adani’s debt dampen his chances of being one of the richest people in the world? Let us know in the comment section available in the marketfeed app.
Mukesh Ambani has played a pivotal role in Reliance Industries Ltd’s (RIL) multi-fold and aspirational growth into India’s largest conglomerate. His company has established a dominant presence in key sectors, making it a vital entity for the development of our country. In recent years, their fortune and influence have flourished to new heights. The business empire is currently worth a whopping $215 billion! The Reliance brand has become part of our day-to-day lives.
Last week, Ambani mentioned plans to speed up the leadership transition at the oil-to-telecom conglomerate. Investors and media houses have been speculating on the matter for years. He wants to ensure a seamless transition of RIL to the next generation of young leaders— his children. In this article, find out why succession planning is crucial for Reliance Industries and how Ambani aims to go about it.
Why is Succession Planning Important for RIL?
Succession planning is always tricky in a large family-run business. In 2002, visionary entrepreneur and founder of RIL Dhirubhai Ambani passed away due to a stroke. Since he did not leave a will, a nasty feud broke out between his children— Mukesh Ambani and Anil Ambani. RIL was worth around Rs 28,000 crore at the time. There was confusion regarding the business segments each sibling would run.
Their mother, Kokilaben Ambani, intervened and brokered a split in 2005. The oil refining and petrochemicals business was left to Mukesh, while the finance, infrastructure, power, and telecom ventures were handed over to Anil. What followed after this split is well-known to most of us.
The Downfall of Anil Ambani:
In 2008, Anil Ambani was the sixth richest person in the world with a net worth of $42 billion. However, all his businesses are now drowning in debt as a result of poorly executed strategies. Reliance Communications (RCom) suffered due to heavy competition and technological advancements in the telecom industry. Reliance Infra, Reliance Capital, and Reliance Power did not perform as expected.
These entities defaulted on loans worth tens of thousands of crores and continue to face legal battles. In 2020, a filing at a London court revealed that Anil Ambani has pleaded poverty and claimed that his net worth is “zero”. His brother even stepped in to settle an overdue payment and saved him from a jail term. He lacked the constant innovation and investment needed to drive the businesses forward. These events had a severe impact on the Reliance brand.
Mukesh Ambani’s Business Empire:
With a forward-looking mindset, Mukesh Ambani has led RIL to the most profitable company in India. With a market cap of Rs 1,601 lakh crore, it is the largest company in India. RIL has evolved into an integrated player across energy, materials, retail, telecom, entertainment, and digital services. Their products and services are used by all Indians, across economic and social spectrums. As of June 2021, RIL’s contribution to India’s gross domestic product (GDP) remains unmatched at 6.8%!
Based on the lessons he learnt from the rivalry with his brother, Mukesh Ambani now wants to ensure a smooth transition of power. A feud or fallout in his family would be catastrophic not only for the growth of RIL but for the economy at large.
Decoding Mukesh Ambani’s Succession Plan
At his Family Day speech on December 28, Mukesh Ambani said he aims to avoid his father’s mistake of not making clear provisions for the transfer of power. He also indicated that the leadership transition to the next generation will begin shortly. The Reliance NextGen will consist of his three children— Akash Ambani, Isha Ambani, and Anant Ambani. Mukesh Ambani has immense faith that they will take Reliance Industries to greater heights.
A short excerpt from Mukesh Ambani’s speech:
“From seniors belonging to my generation to the next generation of young leaders, I would like this process to be accelerated. All seniors— myself included— should now yield to the highly competent, extremely committed, and incredibly promising young leadership talent at Reliance. We should guide them, enable them, encourage them and empower them… and sit back and applaud as they perform better than us. Let me summarise it this way. At Reliance we must build an organisational culture that outlasts its leaders.”
As per speculative reports, the shares of RIL’s holding company will be put into a trust. The five family members (Mukesh, wife Nita Ambani, and their three children) will own shares in this trust. Various long-term confidants and executives may also hold positions on the trust’s board. While the entrepreneurial drive remains with the family members, the day-to-day operations will be run by highly skilled professionals.
The next generation of leaders will be expected to introduce innovative ideas and execute them efficiently in order to maintain RIL’s rich legacy. The venture into digital technology and renewable energy sectors will be led by the three children. We will have to wait and see how they handle the pressures of running one of the world’s largest business houses.
What are your views on RIL’s succession plan? Let us know in the comments section of the marketfeed app.
Hero MotoCorp Ltd has announced the expansion of its operations in Argentina, with the opening of a flagship dealership in Buenos Aires in partnership with Gilera Motors Argentina (GMA). GMA will make investments to rapidly expand all business operations for Hero MotoCorp’s products. This move is expected to generate nearly 500 new jobs in the region.
DoT returns bank guarantees worth Rs 6,500 crore to Airtel, Vodafone Idea
The Department of Telecommunications (DoT) has returned a cumulative amount of ~Rs 6,500 crore of bank guarantees (BGs) to Bharti Airtel and Vodafone Idea over the last few days. In the latest telecom relief package, the government cut BG requirements against statutory dues such as licensee fees by 80%. The BGs that are being returned were against license fees and spectrum usage charges.
L&T signs pact with Kemroc for distribution of cutting-edge products in India
Larsen & Toubro (L&T) has entered into a pact with Germany-based Kemroc to distribute its cutting-edge products in India. Kemroc is a global manufacturer of attachments for excavators and backhoe loaders. The agreement covers Kemroc-developed special attachments, including its patented EK series of chain cutters. This strategic partnership will enable L&T to expand its product offerings and provide comprehensive solutions to customers in the construction industry in India.
Angel One’s client base jumps 146% YoY to 7.32 million in November
Angel One Ltd reported a 146% year-on-year (YoY) jump in client base to 7.32 million in November 2021. Its client base grew 5.6% compared to the previous month. Gross client acquisition stood at 0.45 million in November 2021, rising 3.5% from October 2021 and 193% from November 2020. The company’s retail turnover market share in the overall equity segment rose to 21% during the same month.
Ashoka Buildcon emerges lowest bidder for Road Ministry project
Ashoka Buildcon Ltd has emerged as the lowest (L-1) bidder for a tender floated by the Ministry of Road Transport & Highways. The project consists of the construction of a six-lane link road (NH-1665) with a paved shoulder configuration to Mopa Airport in Goa. The quoted bid price of the project is Rs 76,941 crore.
SPARC signs pact with Biomodifying for licensing of novel drug targets against cancer
Sun Pharma Advanced Research Company (SPARC) has entered into an agreement with US-based Biomodifying LLC. The partnership seeks to exclusively license Biomodifying’s intellectual property (IP), including all patents and patent applications. It also includes antibodies developed for multiple uses including cancer. Under the agreement, Biomodifying is eligible for an up-front payment, milestone payments on pre-specified clinical, regulatory, and commercial milestones, as well as royalties on sales.
Digital First revolution to make India more inclusively prosperous: Mukesh Ambani
Reliance Industries Ltd (RIL) Chairman Mukesh Ambani said the rapid shift towards the adoption of digital technologies, and very soon a ‘digital first’ world, would result in a more equal world. Ambani said he was proud of the fact that Jio had taken the lead in ensuring that people had access to affordable high-speed data connectivity, a prerequisite for the digital revolution. He is also bullish on blockchain technology, stating that it will redefine the financial world. Mukesh Ambani was speaking at the Infinity Forum, hosted by International Financial Services Centres Authority (IFSCA).
Meanwhile, Prime Minister Narendra Modi also called for a “fintech revolution” to achieve financial empowerment of every single citizen.
Govt plans to bring uniform base price for city gas distribution: Report
As per a report from CNBC-TV18, the Ministry of Petroleum & Natural Gas has prepared a mechanism for uniform base price for gas. The uniform base price formula will be based on Regassified Liquified Natural Gas (RLNG), Compressed Biogas, and domestically produced gas. This move will help increase the availability of gas from different sources and meet the gas requirements of city gas distributors (CGDs).
Morepen Labs gets USFDA approval to export Allegra
Morepen Laboratories Ltd has received approval from the US Food & Drug Administration (USFDA) to export Fexofenadine (Allegra) to the US market. Fexofenadine is the most widely used, second-generation antihistamine drug used for the treatment of allergy symptoms and hay fever. Morepen Labs is the third-largest exporter of the drug in the world and is likely to move up in the ranks after this approval.
SEBI imposes Rs 25 crore fine on Ambani and Family
Market regulator SEBI or Securities and Exchange Board of India has imposed a Rs 25 crore fine on Mukesh Ambani, Anil Ambani, Nita Ambani, Tina Ambani, KD Ambani, and other family members, in a case dating 20 years back. According to SEBI guidelines, any promoter buying into more than 5% stake/voting rights in a company has to make a public announcement to its shareholders, in case they may withdraw from the company for whatsoever reason. According to SEBI, there were multiple violations made with regard to this by members of the Ambani family.
AstraZeneca Sends Legal Notice To Serum Institute Over Delays In Vaccine Supply
UK-based AstraZeneca has sent a legal notice to Pune-based vaccine maker Serum Institute of India(SII). The notice comes after AstraZeneca alleged that Serum Institute is delaying the supply of vaccines under contract and is also violating obligations to other countries in supplying the Covishield vaccine to other countries. Adar Poonawala, CEO of SII has said that the delay is because of the Centre’s decision to halt vaccine exports temporarily. He also said that he would temporarily prioritize domestic needs.
Macrotech Developers IPO subscribed 35% on Day Two
Macrotech Developers or formerly known as Lodha World launched its IPO on April 7, 2021. The company was subscribed 26% on the first day of the bidding, receiving. bids for 95.91 lakh equity shares. On the second day, the company was subscribed 35%. The company is known for building the Trump Towers in Mumbai and the tallest building in India, World One.
Read MoreHere. To Know More About Macrotech Developers, Click Here
Zydus Gets Usfda Nod For Drugs Used To Treat Hypertension And Cancer
Indian Pharmaceutical company Zydus Cadila has received approval from the United States Food and Drug Administration for Ibrutinib capsules to treat cancer and Macitentan tablets that are used to treat hypertension.
Kalpataru Power Transmission Ltd’s (KPTL’s) wholly-owned subsidiary in Brazil has completed the acquisition of 51 percent controlling stake in Fasttel Engenharia Ltda. Fasttel specializes in engineering, procurement, and construction (EPC) and maintenance of power transmission lines, distribution systems and sub-stations
Minda Corp: Co-Signs Strategic Partnership With Israel Based Company For First Unique Collision Avoidance Technology For 2 Wheelers In India
Minda Corporation announced a strategic partnership with an Israel-based Ride Vision, an advanced driver-assistance systems company. The company plans to bring artificial intelligence-based collision avoidance systems to the Indian two-wheeler market. The company in its quarterly report had announced that it was going to pump Rs 250 crores into business expansion. The company had reported a ~19% increase in profits over the last quarter.
Airtel Refused To Pay Videocon’s AGR Dues: DoT to SC
The Department of Telecommunications has told the Supreme Court that Airtel, which had acquired now-defunct Videocon’s telecom spectrums in 2016 has refused to pay the AGR dues applicable on the spectrum. The DoT has raised a demand to recover Rs 1375 crore of Videocon’s dues payable by Airtel. Airtel on the other hand holds that the DoT has made no such demand to recover any such dues and has agreed in the past that these dues are solely recoverable from Videocon itself.
Infosys: Co Announces Strategic Long-term Collaboration With ArcelorMittal For Digital Transformation
Indian IT-Giant Infosys has announced a long-term collaboration with multinational steel manufacturing corporation ArcelorMittal for Digital Transformation. Infosys will offer application management and business process management (BPM) services to ArcelorMittal’s Business Center of Excellence (BCoE) in Europe.
AstraZeneca Vaccines Causes Rade Blood Clots: New Advisory Issued
UK vaccine maker AstraZeneca Plc’s Covid-19 vaccine has been causing blood clots in individuals below 30. In fact, there have been 19 deaths recorded so far due to blood clots caused by the vaccine in the UK. The Medicines and Healthcare products Regulatory Agency(MHRA) has issued new advisories. It has stated that the blood clot in found rarely, in close to 4 out of 10 lakh people. The UK’s Joint Committee on Vaccination and Immunisation (JCVI) has advised offering an alternative to the AstraZeneca Covid-19 vaccine to adults under the age of 30, due to the blood clot link.
Vehicle Registrations Down By 28.64% In March 2021: FADA
The Federation of Automobile Dealers Associations (FADA) has said that overall vehicle registrations are down by 28.64% in March 2021 as compared to last month. Tractor and Passenger Vehicles are the only two segments that have witnessed double-digit growth in the season. As compared to March 2020, Two-wheeler sales were down by 35.26%, Three-wheeler sales reduced by 50.72%, Three-wheeler sales were down by 50.72%.
Bharat Biotech’s Covaxin gets approval for restricted emergency use: Report
The Subject Expert Committee of the Central Drugs Standard Control Organisation (CDSCO) on Saturday gave its approval for the restricted emergency use of Covaxin in India. Covaxin is jointly developed by Bharat Biotech and the Indian Council of Medical Research (ICMR). This is the second Covid-19 vaccine that has been recommended for emergency use approval to DCGI, after Serum Institute’s locally produced Oxford-AstraZeneca vaccine ‘Covishield’. The Drug Controller General of India (DCGI) will give the final approval to both the vaccine candidates. [This has been reported by news agencies PTI and ANI, citing government sources]
SEBI fines RIL, Mukesh Ambani for manipulative trades in RPL
The Securities and Exchange Board of India (SEBI) has imposed a fine of Rs 25 crore on Reliance Industries Ltd (RIL) and Rs 15 crore on its chairman, Mukesh Ambani, for their alleged role in manipulative trades in Reliance Petroleum Ltd (RPL) in 2007. The penalties imposed pertain to the trading of RPL shares in the cash and futures segments in November 2007. SEBI believes illegal profits were made by RIL and other parties through manipulation of RPL’s share prices. This followed RIL’s decision in March 2007 to sell a 4.1% stake in RPL, a listed subsidiary that was later merged with RIL in 2009.
Tata Steel transfers stake in processing arms to TSDPL
Tata Steel Ltd has transferred the 51% stake it holds in Jamshedpur Continuous Annealing & Processing Company Private Ltd (JCAPCPL) and 50% stake it holds in Tata BlueScope Steel Private Ltd (TBSPL) to Tata Steel Downstream Products Ltd (TSDPL). The company stated that this step was taken to reorganise the company’s India footprint into four clusters to drive scale, synergies, and create value for all stakeholders. The transfer will help consolidate its downstream steel processing services.
EID Parry India Ltd has decided to close down one of its non-operating sugar units in Tamil Nadu. The company stated that the expectation of revival of cane cultivation in the area is low due to a variety of factors. The company’s sugar mill at Pettavaithalai in Tamil Nadu had not been operational due to the continuous non-availability of adequate sugar cane. East India Distilleries (EID) Parry India Limited is a wholly-owned subsidiary of the Murugappa Group.
Exports decline by 0.8% in December; trade deficit widens to $15.71 billion
India’s exports declined marginally by 0.8% to $26.89 billion in December 2020 due to contraction in sectors like petroleum, leather, and marine products, according to preliminary data released by the Ministry of Commerce & Industry. The trade deficit in December widened to $15.71 billion, as imports grew by 7.6% to $42.6 billion. During the same period, oil imports declined by 10.37% to $9.61 billion.
Tower damage case: Airtel writes to DoT, says Jio’s charges are baseless
Bharti Airtel has sent a letter to the Department of Telecommunications (DoT), slamming Reliance Jio’s allegations that channel partners of rival telecom companies were inciting and provoking agitators involved in tower disruption. The company stated that Jio’s complaint should be dismissed “with the contempt that it deserves”. Airtel further urged the DoT to bring forth a policy to mandate ICR (Intra circle roaming) in such situations of vandalism and network outages as a matter of course so that customers were never inconvenienced.
Free Covid-19 vaccine for all healthcare workers in first phase: Harsh Vardhan
Union Health Minister Dr. Harsh Vardhan on Saturday said that in the first phase of Covid-19 vaccination, free vaccine shall be provided across the nation to most prioritised beneficiaries that include one crore healthcare and two crore frontline workers. He also said that details of how further 27 crore priority beneficiaries are to be vaccinated until July are being finalised. As India began its nationwide Covid-19 vaccine dry run from today before the rollout of a potential vaccine to the citizens, the health minister appealed to people not to pay heed to rumors about the Covid-19 vaccine.
State-owned Power Finance Corporation (PFC) has raised its borrowing limit to Rs 1.18 lakh crore for the ongoing financial year. The company now plans to raise a maximum of Rs 83,000 crore from long-term borrowing, Rs 15,000 crore from long-term foreign currency borrowing, Rs 5,000 crore from short-term borrowing, and Rs 15,000 crore from commercial papers. PFC further stated that it does not see any challenges in raising the borrowing amount, which is being used to lend for various power sector projects in India.
Aviation Minister Hardeep Singh Puri on Saturday said that flights from India to the United Kingdom will resume from January 6, while services from that country to here would resume from January 8 onwards. He stated that this schedule is valid till 23 Jan 2021 and further frequency will be determined after reviews. Earlier, India had suspended all passenger flights connecting the two countries from December 23 to January 7, as a new variant of coronavirus emerged in the UK.
TVS Motor Company Ltd, on Saturday, reported a 17.5% YoY increase in total sales to 2,72,084 units in December. The company, which primarily makes two-wheelers and three-wheelers, had sold 2,31,571 units in December 2019. The total two-wheeler sales during the month increased by 20% to 2,58,239 units, as against 2,15,619 in December 2019. The total exports increased by 28% to 94,269 units last month, as against 73,512 in the year-ago period.
Reliance Jio to launch 5G services in India by second half of 2021: Mukesh Ambani
RIL chief Mukesh Ambani, on Tuesday, said that Reliance Jio will pioneer the 5G revolution in India by the second half of 2021. He was speaking at the fourth edition of the India Mobile Congress. The solution for the fifth-generation wireless service will be built indigenously, said the RIL chairman. Ambani further said that India requires policy developments for the early implementation of 5G services.
ICICI Bank to sell 2.21% equity stake in ICICI Securities via OFS
ICICI Bank said that it will be selling up to 71.21 lakh shares (2.21% equity) in ICICI Securities through an offer for sale (OFS). An OFS is a method by which a promoter of a listed company sell their shares and reduce their holdings. The floor price of the OFS has been set at Rs 440 per share. The lender stated that this move is to meet the minimum public shareholding (MPS) norm.
Godrej Properties acquires 18-acre land in Bengaluru to build housing project
Godrej Properties Ltd has bought an 18-acre land parcel in Bengaluru to develop a housing project. The project will offer 2.4 million square feet of saleable area, comprising primarily residential apartments. The site, located in Whitefield, offers a well-developed social and civic infrastructure with multiple schools, hospitals, and commercial spaces in close proximity.
Canara Bank sets floor price of Rs 103.50 per share for QIP
Canara Bank Ltd has set a floor price of Rs 103.50 per share for its proposed Rs 2,000 crore qualified institutional placement (QIP). A QIP allows a listed company to raise capital from domestic markets without the need to submit any pre-issue filings to market regulators. A meeting of the sub-committee of Canara Bank’s board is scheduled to be held on December 10. At the meeting, the board will determine the issue price for the equity shares, as well as the number of shares to be allotted to the qualified institutional buyers.
Passenger vehicle retail sales rise 4% in November on festive demand: FADA
The Federation of Automobile Dealers Association (FADA) said that passenger vehicle retail sales saw an increase of 4.17% YoY in November. The number of units sold in November increased to 2,91,001, as compared to 2,79,365 units in November 2019. FADA stated that there had been a rise in vehicle registrations over the Diwali-Dhanteras period. However, two-wheeler sales declined 21.4% YoY to 14.13 lakh units during the same month.
Indoco Remedies wins tenders worth Rs 140 crore in Germany for Allopurinol tablets
Indoco Remedies Ltd said that it has won tenders worth Rs 140 crore in Germany, for the supply of Allopurinol tablets. The tablets are used to treat gout and kidney stones. The drug firm has stated that the revenue expected from this business is Rs 70 crore per annum. The supplies to Germany will begin from January 2021 and continue till the end of 2022.
TVS Srichakra to invest Rs 1,000 crore to expand manufacturing capacity
TVS Srichakra Ltd will invest around Rs 1,000 crore to ramp up manufacturing at its Madurai and Pantnagar plants. The investment will increase its two and three-wheeler tyre capacity by 25%-30% and double the off-highway tyre capacity. The proposed investment will be made over a three-year period. The company stated that this expansion programme is aimed at meeting the growing demand across its customer base- both domestically and globally.
Mindspace REIT to raise Rs 200 crore via debentures
Mindspace Business Parks REIT said it will raise up to Rs 200 crore through the issuance of debentures on a private placement basis. The decision was taken at an executive committee meeting of K Raheja Corp Investment Managers LLP, which is the manager of Mindspace REIT. Mindspace Business Parks is India’s second Real Estate Investment Trust (REIT), after Embassy Office Parks.
Cupid wins order to supply Covid-19 Antigen Based Rapid Test Kits
Cupid Ltd has received a purchase order from Uttar Pradesh Medical Supplies Corporation for the supply of Covid-19 Antigen Based Rapid Test Kits. The estimated value of the order has been set at Rs 8.27 crore. This is the company’s first order to supply its specialised test kits.
NBCC (India) Ltd said that it secured a total business of Rs 324.81 crore in November 2020. The construction services company is a Government of India Navaratna enterprise. The firm operates through 3 segments- project management consultancy (PMC), real estate development, and engineering, procurement & construction (EPC).
Reliance has turned into an empire within a span of a few decades. Mukesh Ambani, the Chairman of Reliance Industries, is now the world’s 6th richest man. At the age of 63, he has taken Reliance to the heights one can only dream of. The oil-to-telecom company has a strong grip in several sectors, thus becoming a very important entity from the nation’s perspective. That is why the question of who after Mukesh Ambani is important.
Mukesh Ambani will be hoping that his family has a shared vision for Reliance’s future. Thus, learning from the lessons he learnt from the rivalry with his brother after the death of their father, Dhirubhai Ambani at the age of 69years. He will be hoping that nothing of that sort happens in his family. To make this happen, it is important for him to process a seamless transition of Reliance into the new hands. Before that, let’s have a look at the family of this Indian business tycoon and try to understand the possible heirs of his business.
Mukesh and Nita Ambani have three kids. Anant Ambani (25) is the youngest of three children. Akash Ambani (29) and Isha Ambani (29) are the older twins who were born in 1991. All three children are working at Reliance in senior posts. Probably, Mukesh Ambani will be passing the baton to them as he prepares Reliance for the NextGen.
Isha Ambani and Reliance Retail
Isha received her undergraduate degree in Psychology and South Asian studies from the prestigious Yale University. She went on to do her MBA from Stanford University. She also has experience working at McKinsey & Company in New York before joining Reliance.
Isha joined the family’s telecom and retail businesses as a director in 2014. As per the rumours, she is the one who gave her father the idea to launch Reliance Jio in 2016 after facing problems with slow internet speed. It is widely believed that she has been a central figure for the latest developments in the Jio and Reliance Retail segment over the past two years.
She was one of the lead negotiators in the deal through which Facebook acquired a 9.99% stake in Jio for Rs 43,574 crore. Along with her brother, Akash Ambani, she flew to the US in December last year for the negotiations. The trust in Isha’s leadership can be seen from the fact that it was she and not her father who announced Reliance Retail’s deal with Future Retail. She is likely to lead Reliance Retail in the future.
Akash Ambani and Reliance Jio
After completing his schooling in India, Akash went to the US to get his undergraduate degree in Economics. Just like Isha, Akash also joined his father’s company in 2014. Currently, he is the Director and Head of Strategy and a member of the Executive Committee at Reliance Jio.
Akash played a key role in completing Jio’s recent mega-deals with big tech companies like Google, Qualcomm and Intel. He is more involved in the digital services applications side of Reliance Jio and Reliance Retail. Apart from business, Akash has a keen interest in sports. This can be seen by his huge involvement in the Indian Premier League (IPL) and Indian Super League (ISL).
Reliance’s 43rd AGM showed how the two twins were launching the new Jio products. This tells that the future of tech-related Reliance adventures will be in the hands of these youngsters. Recently, Isha and Akash Ambani debuted in the technology list of Fortune’s ‘40 Under 40’ list of influential people around the globe.
Anant Ambani and Petrochemicals
Anant is the youngest of the three siblings. He followed his elder brother Akash and went to Brown University in the US to pursue his graduation. He made headlines after losing 108 kg in 18 months.
Anant Ambani currently serves as an Additional Director on the board of Jio. More of his contribution has come in social and foundational work at the Jamnagar refinery. He was the one to represent the Ambanis when they handed over Rs 5 crore towards Maharashtra flood relief work. After taking care of his health in recent years, Anant might now be pushed to work at significant roles at Reliance, just like her other two siblings.
Interestingly, Reliance’s annual report 2019-20 consists of pictures of all three siblings in the Reliance Retail and Reliance Jio domain but the Refining & Marketing (R&M) and Petrochemicals segments consist only of Anant’s image. This might be due to the involvement of the youngest one in the core business of Reliance, which is oil & gas.
At the Reliance at 40 years celebration, Anant Ambani also presented himself as one who deeply loves the environment. We can’t help but wonder if Anant Ambani is the force behind Reliance’s shifting to renewable energy from Petrochemicals. You can read all about it here.
Reliance and India’s Future
The Indian business tycoon, Mukesh Ambani, has huge faith that his children will be taking Reliance even higher. Trusting and bestowing responsibility to the youth in their 20s shows that the power decisions of Reliance will be taken by the Ambanis in the future as well. These NextGen stars are well aware of the changing environment of the world. They are expected to come up with more innovative ideas and execute them with more efficiency to maintain the legacy of Reliance in future years.
Reliance Industries is at a crossroads. They are venturing rapidly into different sectors. Also, they are planning to expand massively in the technology segment. Another domain where Reliance will move is into the renewable energy sector. These changes will be led by the three children of Mukesh and Nita Ambani. Will they be able to match the legacy of their father? Can they take the Reliance brand to even higher highs? It has also been made clear that Reliance will be playing an important role in the growth of the Indian economy, as well. Can these three youngsters handle the pressure of running the business and taking up the country’s economy? All to be seen!
Stocks rallied globally as investors rushed back into technology and health-care firms on bets that the U.S. election results will trigger no major tax hikes or regulatory changes that would derail these sectors. Futures on the tech-heavy Nasdaq 100 jumped another 2.6% after the underlying index surged on Wednesday when the vote count failed to produce a clear Democratic sweep as some had expected. The reduced likelihood of a multi-trillion-dollar stimulus package in a divided Congress helped pushed the dollar down the most versus the euro since March. Increases in tech shares and some strong corporate results lifted the Stoxx Europe 600 index.
Futures on the S&P 500 Index increased 1.8% as of early morning New York time.
The Stoxx Europe 600 Index climbed 0.9%.
The MSCI Asia Pacific Index climbed 2.5%.
2. Biden’s Wins in Michigan, Wisconsin Put Him on Brink of Victory
Joe Biden stood on the brink of claiming the presidency from Donald Trump on Thursday, with a handful of states expecting to complete their vote counts despite Republicans opening legal fights to stop counting in at least two states. Biden held 264 Electoral College votes out of the 270 needed to win the White House, according to the Associated Press. Trump has 214. Biden needs only to win an additional outstanding state, such as Nevada, where he is narrowly leading, or Georgia, where his campaign believes mailed votes will push him over the top. He also likely needs to hold Arizona, which the Associated Press has called in his favor but which the Trump campaign says it can still win. A Biden win in Pennsylvania could also clinch the race.
3. More Americans Than Forecasted Apply for Jobless Benefits
More Americans than expected filed for state unemployment benefits last week, underscoring continued churn in a labour market that continues to recover only gradually. Initial jobless claims in regular state programs totalled 751,000 in the week ended Oct. 31, down from an upwardly revised 758,000 in the prior week, Labor Department data showed Thursday. Continuing claims – or the total number of Americans claiming ongoing state unemployment assistance – fell by 538,000 to 73 lakh in the week ended Oct. 24, the sixth straight decline. Still, the number of people claiming support in a federal program that offers extended assistance increased as more Americans exhausted their regular state benefits.
4. Saudis Cut Oil Prices for Asia as Virus Clouds Energy Market
Saudi Arabia cut most oil pricing for its customers in Asia and the U.S. as a resurgence in the coronavirus clouds the outlook for energy markets. State producer Saudi Aramco decreased December pricing for shipments of Arab Light crude to Asia, its largest regional market. Oil dropped around 10% last week as European nations including Germany and France announced new lockdowns and daily virus cases hit a record in the U.S. While crude has since recovered most of those losses, the market continues to face headwinds, OPEC Secretary-General Mohammad Barkindo said.
5. Saudi Arabia’s PIF Invests About $1.3 Billion in Mukesh Ambani’s Reliance Retail
Saudi Arabia’s Public Investment Fund, or PIF, plans to invest about $1.3 billion (INR 9600 cr) in Mukesh Ambani’s retail unit as Asia’s richest man continues to add marquee backers in a fundraising spree. The sovereign wealth fund will pick a 2.04% stake in Reliance Retail Ventures Ltd. The stake sale values India’s largest retailer at about $62.4 billion (INR 4.62 lakh cr). This will be the third investment for PIF into Reliance, helmed by Ambani, as he seeks to transform the company into a retail and technology behemoth and pivot away from its staple oil-refining business that he inherited in 2002.
6. TikTok’s Parent ByteDance Seeks to Raise Cash at $180 Billion Valuation
ByteDance is in discussions to raise $2 billion (INR 14,800 cr) before listing some of its businesses in Hong Kong, even as it seeks to avoid a ban on its TikTok service in the U.S. The Chinese company is in talks with a group of investors including Sequoia over funding that would boost its valuation to $180 billion. ByteDance could then start preparing some of its biggest assets including Douyin and Toutiao for an IPO in Hong Kong. The company was previously valued at $140 billion. ByteDance, already the world’s most valuable startup, is in the throes of fighting a Trump administration ban on TikTok in the U.S. after the video service was labelled a national security threat.
7. Bitcoin Extends Rally With Chart Watchers Eyeing $20,000
Bitcoin is in rally mode once more. Whether it’s uncertainty from the U.S. election, the future of the pandemic or simply more investor interest, the cryptocurrency is at the highest level since January 2018. Bitcoin was up 3.3% at $14,463 (INR 10.7 lakh). The digital currency has been benefiting from high-profile investments from the likes of Square Inc. and Paul Tudor Jones. JPMorgan Chase & Co.’s JPM Coin was reportedly used to make a payment for the first time. Proponents argue bitcoin can be a diversifier in times of uncertainty, so events like lockdowns across Europe or delays of U.S. election results could be fueling its rise.
8. Indonesia slumps into first recession since the 1998 Asian crisis
Indonesia fell into recession for the first time in more than 20 years in the third quarter as the COVID-19 pandemic battered consumption and business activity in Southeast Asia’s largest economy. Gross domestic product (GDP) shrank 3.49% on an annual basis in the July-September period, data from the statistics bureau showed, slightly more than the 3% contraction expected. The economy contracted 5.32% year-on-year in the second quarter. The government says its economy is showing signs of improvement, but analysts say they see more weakness over the coming months.
9. IBM unveils cloud for 5G telcos, gets Nokia and Samsung as partners
International Business Machines Corp on Thursday became the latest U.S. technology company to launch a cloud platform directed at telecom operators deploying 5G and signed up Nokia and Samsung as partners. A cloud platform uses software instead of physical equipment to do network functions, helping telecom operators to build 5G networks faster, reduce costs and sell customised services to business clients. The U.S. government has been pushing big U.S. companies to get more involved with 5G – a technology which promises to enable everything from self-driving cars to remote surgery and more automated manufacturing. Companies such as Microsoft and Amazon have launched their own cloud platforms targeting telecom operators. IBM will supply services to its telecom partners to run their networks and also to assist them in selling custom products to their customers
10. Dutch bank ING to cut 1,000 jobs by the end of next year as virus crisis hits
Dutch bank ING said Thursday it will shed 1,000 jobs by the end of 2021 and close offices in South America and Asia as the coronavirus pandemic hits the global economy. The job losses come despite “resilient” third-quarter results, with profits down 41.4% and revenue down 7.3%, the bank said in a statement. “The pandemic continues to have a significant impact everywhere, with the second wave in Europe and the US putting further pressure on consumers and businesses,” ING CEO Steven van Rijswijk said. ING is the Netherlands’ number one bank, employing 53,000 people in more than 40 countries.
Recently, Mukesh Ambani was spotted speaking to economist and business journalist Omkar Goswami during a book launch event. In the conversation, the chairman of Reliance Industries revealed he is working towards these three things:
Transforming India into a digital society.
Transforming the education sector in India.
To move India away from fossil fuels to renewable energy.
We have seen Reliance already putting a lot of efforts in the digital transformation of India. We did a separate write-up “Reliance Jio: The driving force behind India’s digital transformation“. Here, you can read how the company has built itself as one of the leaders of digital change in the country.
Coming back to the interview, the point which surprised us was the thought process of Mukesh Ambani to aid India in shifting from fossil fuels to renewable energy. He said “the third thing that we are working towards is really the transformation of energy. And we think again that the world is right and India is in the right mindset to completely, in the next few decades, move away from fossil fuels to completely renewable energy.”
The core business of Reliance is oil. They came to the global map with unimaginable success in the oil & gas industry. Oil and hydrocarbon are two of the primary fossil fuels. So if Reliance wants to drive the change to renewable energy, doesn’t it counters their own business? What does this statement really signal?
Reliance has grown exponentially this year. They have expanded and received several investments from foreign firms. During the last few months, Nifty 50 rallied mostly due to the heavy presence of Reliance. But all the developments have come either in the Jio front or in the retail domain of Reliance. Its oil & gas business has not expanded much. In fact, a deal with Saudi Aramco in the oil & gas business is pending even after one year of announcement. This situation is completely opposite to what they are facing in different business verticals like telecom and retail, where investors are waiting in line to throw money at Reliance.
How has the business’ numbers changed?
Reliance has operated in several spaces since their inception. From trading yarn to oil to telecom and now to digital transformation and retail segment. One of the key aspects of any business is how they adapt to the changing times. Reliance is a perfect example of how a company should evolve with the market.“Data is the new oil”. We are sure that you have heard this several times in the last few years. It seems like Reliance would accept this literally and think of moving their business line in the future.
The numbers show a downtrend in the oil & gas business for Reliance in the last four years. Also, it shows massive growth in retail and Jio segment. The table below shows the revenue contribution from the different segments in the last four years.
2017
2018
2019
2020
Refining
63.7%
56.4%
50.9%
47.8%
Petrochemicals
23.5%
23.1%
22.3%
17.9%
Crude Petroleum
2.7%
2.3%
2.9%
5.2%
Digital Services
0.2%
4.4%
6.3%
8.4%
Organized Retail
8.6%
12.8%
16.9%
20.1%
(Segment-wise Revenue Contribution)
The table shows how the revenue contribution from the refining and petrochemicals segment has been falling. At the same time, digital services and retail has been on a continuous uptrend. The Compounded Annual Growth Rate, CAGR, (2017-20) for the digital services segments, which stands at 226%, beats all other four segments. It is followed by Organised Retail (49%), petrochemicals (11.9%) and refining (11.4%).
We find a similar pattern when we compare the profits from the oil & gas business with other business. From 2017 to 2020, the profit contribution of the refining segment has been halved from 65% to 30%. Profit generated from petrochemicals has remained constant at around 35%. Contrary to them, organised retail and digital services has jointly contributed more than 30% of the profits in 2020. This percentage was even below 2% in 2017.
No long-love for fossil fuels
Crude oil, hydrocarbon, natural gas or other fossil fuels are limited in nature. Earth does have them in abundance quantity but the rate of its depletion has been very rapid in recent years. In future, there will be a time when oil becomes a scarcity. How would the oil firms conduct exploration then?
The main work of an exploration & production (E&P) company in the oil & gas industry is to search and extract oil and gas. This requires heavy machinery and very high use of technology. Thus, it is no surprise that the companies working in this industry are highly leveraged.
Reliance’s primary work is not in the E&P horizontal (or the upstream segment) but in the downstream segment (Refining and marketing). But if the E&P companies find the level of oil in the surface very low, they won’t be able to sustain their cash inflows. If the E&P companies fail to find oil, how will the Refining and Marketing (R&M) companies like Reliance survive in the long-run?
Again, this is not something which will happen in the next 2-5 years. But, there are high chances of depletion of fossil fuels in the long-run (10-30 years). When this happens, what is left for the core business of Reliance?
Decreasing oil portfolio
Currently, the company holdstwo shale gas joint-ventures with Ensign Natural Resources and Chevron. Three years back they exited two oil blocks it held in Myanmar. In 2016, they exited their Peru’s oil and gas block. These move to sell off blocks signalled their aspiration to leave the upstream segment and rely more on the downstream segment.
At one time, the company had 42 oil & gas blocks domestically. Currently, they hold only 5 of these domestic oil & gas blocks. Also, only two of these blocks are fully owned by the company. BP holds almost 33% of the stake in each of the remaining three domestic blocks.
Leading the change
Not once, but many times, Reliance has voiced their desire to lead India’s change to renewable energy. According to Mukesh Ambani, “Energy is an essential requirement for all 8 billion people on this earth. There is a need to provide efficient, clean, affordable energy. And we have to do it in a responsible way. That’s the business. We should not confuse that between clean and unclean.”
India has pledged to decrease the emissions concentration of its GDP by 33%-35% by 2030 from the levels of 2005. On those lines, Reliance also declared its plans to become net-carbon zero by 2035. The government of India also wish to double their consumption of renewable energy to 20% by 2025. Transforming the energy business of the country will give new growth opportunity to the company.
It is also crucial to mention that entering into renewable energy business does not mean leaving fossil fuels instantly. The use of fossil fuels can be decreased by huge amounts but completely replacing them is not possible.So does Reliance wants to lead the fight in both the domains? Or they want to leave one for another? This is something we have to wait and watch in the next two years. But surely, India is geared for a big change in the renewable energy sector and Reliance could be a very big part of that. Until, next time.
