Signalling a “harmonious and constructive relationship” with his brother Anil, Reliance Industries Ltd (RIL) Chairman and Managing Director Mukesh Ambani on Friday said that RIL is ready for a “big surge forward”.
Addressing his 3.5 million shareholders at RIL’s 36th AGM — exactly five years to the day when he and Anil split the Reliance empire created by their father Dhirubhai Ambani — Mukesh said he was “hopeful and confident” of doubling RIL’s enterprise value in the next 10 years.
“It took three decades for Reliance to create an enterprise value of over $80 billion (Rs 370,000 crore),” he said. “However, I feel hopeful and confident that Reliance can accomplish value creation of a similar magnitude in less than a decade.”
Mukesh further said that RIL had cash equivalent of almost Rs 22,000 crore and will use its strong finances for inorganic growth — growth that comes from acquisition of companies — and investments into new ventures such as power and telecom.
“We are ready to bring into full play our investment mobilisation capabilities, as well as our superior project execution capabilities, into a sector that is crying out for transformational mega initiatives,” he said.
In addition to announcing his investment plans for RIL’s existing businesses such as petrochemical, oil exploration and refining, the biggest announcement was on RIL’s multi-billion dollar foray into the power sector — a sector that was closed to Mukesh due to a January 12, 2006 non-compete agreement with his younger brother.
RIL has planned “mega investments” in thermal, hydel and nuclear power generation, Mukesh said. “For Reliance, power business is a natural and synergistic extension of its energy portfolio.”
Announcing the “game-changing” development of annulling the earlier non-compete agreement with brother Anil, Mukesh said this new agreement opens up the full range of power business for RIL.
“This paves the way for Reliance to participate in the whole value chain of power business, spanning generation, transmission and distribution except non-captive gas-based power plants until 2022,” he said, signalling that he will not get in the way of Anil’s gas-based plants.
While Mukesh did not put a number to RIL’s investment plans, sources in know said RIL could invest anywhere up to $10 billion (Rs 45,000 crore) in the power sector. This includes bidding for the forthcoming ultra mega power projects in Orissa and Chhattisgarh.
“We are drawing up specific plans for mega investments in this (power) sector with clean coal-based power generation projects, hydel projects and also in nuclear power as and when it is opened up,” he said.
Sources said RIL may be planning up to 30,000 MW of power plants over the next five years.