Friday, 19 April 2024
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RIL spent more than $125 billion on capital expenditures over the ten years

  • Reliance Industries Ltd. has made over $125 billion in investments in the telecom and hydrocarbon industries.
  • To improve its oil-to-chemical business, the company invested about $30 billion between FY13 and FY18.
  • According to the analysis, capex intensity would reach a peak of $16 billion in FY23 and then gradually decline to $11.2 billion by FY26E.

Over the past ten years, Reliance Industries Ltd. has made over $125 billion in investments in the telecom and hydrocarbon industries. According to a source, the conglomerate would likely focus its efforts in the next three years on upstream new energy and less capital-intensive retail.

To improve the size, integration, and cost competitiveness of its oil-to-chemical business, the company invested about $30 billion between FY13 and FY18.

Reliance Industries Ltd.

In addition, between FY13 and FY24E, it invested nearly $60 billion in 4G/5G capabilities, establishing a high-growth communications sector. Alongside present cash cow O2C, the telecom industry is predicted to become a major free-cash-flow (FCF) generation business with the likely completion of the pan-India 5G rollout and potential cellular pricing hikes soon.

According to the analysis, capex intensity would reach a peak of $16 billion in FY23 and then gradually decline to $11.2 billion by FY26E. According to Goldman Sachs, new company returns are probably better and the capital to EBITDA turn is faster.

With roughly a twofold increase in offline square foot area over FY21–24E, RIL has frontloaded a significant amount of the retail business‘s capital expenditures. Over the past two years, omnichannel presence has expanded beyond groceries to fashion and leisure, and electronics, and currently accounts for 19% of the retail category topline.

The $10 billion in fully integrated solar and battery manufacturing plants that Reliance plans to build are the first phase of its capital expenditures in new energy.

In the second phase, which is devoted to deployment, the company may establish downstream solar, electrolyzer, and wind capacities for the production of new energy.

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