JOIN USReliance Industries (RIL) has said the company is planning to invest Rs 1.5 lakh crore or $26 billion over the next three years, even as it continues to remain debt-free on a net basis with “margins in core businesses are on the upswing”.
Addressing shareholders at the company’s AGM here on Thursday, RIL Chairman Mukesh Ambani said, “We will be embarking on this investment, the largest we have ever undertaken, in all our five businesses simultaneously.” He felt there are opportunities to participate in the oil and gas exploration sector despite business remaining tough in that space.
RIL will be among the top 5 petchem producers in the world as the company will expand the petchem capacity from 15 mtpa to 25 mtpa, he said, pointing out that the Silvassa Petchem plant to be operational this year. That apart, it has expanded into the fast-growing broadband and retail segments in recent years.
Ambani’s speech at the AGM, which lasted 40 minutes, dwelt on the huge capex plan of Rs 1.5 lakh crore in the next three years but did not divulge any funding plans for the investments. However, the company has built up a war chest for acquisitions, with cash reserves of more than Rs 82,900 crore ($15.3 billion) as of the March-end quarter.
Recent gas discovery 2 km below the currently producing gas field at the KG-D6 block has the potential to significantly add to the resource base, he said, while expecting production of shale gas to be a third of aggregate production this year, and as such, the company would forge long-term partnerships to source crude.
Ambani said retail business has crossed a revenue of Rs 10,000 crore and has achieved cash breakeven. It has achieved an EBITDA of Rs 78 crore and plans to achieve Rs 40,000-50,000 crore over the next few years. Meanwhile, RIL scrip on Thursday settled at Rs 792.30 on BSE, down 1.03 per cent.