Reliance Industries
Reliance Industries Limited is an Indian multinational conglomerate company, headquartered in Mumbai. It has diverse businesses including energy, petrochemicals, natural gas, retail, telecommunications, mass media, and textiles. Reliance is one of the most profitable companies in India, the largest publicly traded company in India by market capitalisation, and the largest company in India as measured by revenue. It is also the tenth largest employer in India with over 236,000 employees. RIL has a market capitalisation of US$243 billion as of March 31, 2022. The company is ranked 155th on the Fortune Global 500 list of the world 's biggest corporations as of 2021. Reliance continues to be India's largest exporter, accounting for 8% of India's total merchandise exports and access to markets in over 100 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. The company has negative free cash flows. History. 1960–1980. The company was co-founded by Dhirubhai Ambani and Champaklal Damani in 1960's as Reliance Commercial Corporation. In 1965, the partnership ended and Dhirubhai continued the  polyester business of the firm. In 1966, Reliance Textiles Engineers Pvt. Ltd. was incorporated in Maharashtra. It established a synthetic fabrics mill in the same year at Naroda in Gujarat. On 8 May 1973, it became Reliance Industries Limited. In 1975, the company expanded its business into textiles, with "Vimal" becoming its major brand in later years. The company held its Initial public offering (IPO) in 1977. The issue was over-subscribed by seven times. In 1979, a textiles company Sidhpur Mills was amalgamated with the company. In 1980, the company expanded its polyester yarn business by setting up a  Polyester Filament Yarn Plant in Patalganga, Raigad, Maharashtra with financial and technical collaboration with E. I. du Pont de Nemours & Co., U.S. 1981–2000. In 1985, the name of the company was changed from "Reliance Textiles Industries Ltd." to "Reliance Industries Ltd." During the years 1985 to 1992, the company expanded its installed capacity for producing polyester yarn by over 1,45,000 tonnes per annum. The Hazira petrochemical plant was commissioned in 1991–92. In 1993, Reliance turned to the overseas capital markets for funds through a global depository issue of Reliance Petroleum. In 1996, it became the first private sector company in  India to be rated by international credit rating agencies. S&P rated Reliance "BB+, stable outlook, constrained by the sovereign ceiling". Moody's rated "Baa3, Investment grade, constrained by the sovereign ceiling". In 1995/96, the company entered the telecom industry through a joint venture with NYNEX, USA and promoted Reliance Telecom Private Limited in India. In 1998/99, RIL introduced packaged LPG in 15 kg cylinders under the brand name "Reliance Gas". The years 1998–2000 saw the construction of the integrated petrochemical complex at Jamnagar in Gujarat, the largest refinery in the world. 2001 onwards. In 2001, Reliance Industries Ltd. and Reliance  Petroleum Ltd. became India's two largest companies in terms of all major financial parameters. In 2001–02, Reliance Petroleum was merged with Reliance Industries. In 2002, Reliance announced India's biggest gas discovery (at the Krishna Godavari basin) in nearly three decades and one of the largest gas discoveries in the world during 2002. The in-place volume of natural gas was in excess of 7 trillion cubic feet, equivalent to about 120 crore (1.2 billion) barrels of crude oil. This was the first ever discovery by an Indian private sector company. In 2002–03, RIL purchased a majority stake in  Indian Petrochemicals Corporation Ltd. (IPCL), India's second largest petrochemicals company, from the government of India, RIL took over IPCL's Vadodara Plants and renamed it as Vadodara Manufacturing Division (VMD). IPCL's Nagothane and Dahej manufacturing complexes came under RIL when IPCL was merged with RIL in 2008. In 2005 and 2006, the company reorganised its business by demerging its investments in power generation and distribution, financial services and telecommunication services into four separate entities. In 2006, Reliance entered the organised retail market in India with the launch of its retail store format under the brand name of 'Reliance  Fresh'. By the end of 2008, Reliance retail had close to 600 stores across 57 cities in India. In November 2009, Reliance Industries issued 1:1 bonus shares to its shareholders. In 2010, Reliance entered the broadband services market with acquisition of Infotel Broadband Services Limited, which was the only successful bidder for pan-India fourth-generation (4G) spectrum auction held by the government of India. In the same year, Reliance and BP announced a partnership in the oil and gas business. BP took a 30 per cent stake in 23 oil and gas production sharing contracts that Reliance operates  in India, including the KG-D6 block for $7.2 billion. Reliance also formed a 50:50 joint venture with BP for sourcing and marketing of gas in India. In 2017, RIL set up a joint venture with Russian Company Sibur for setting up a Butyl rubber plant in Jamnagar, Gujarat, to be operational by 2018. In August 2019, Reliance added Fynd primarily for its consumer businesses and mobile phone services in the e-commerce space. On the 18th August 2021, Reliance Industries Limited (RIL) stated that it had shut down its manufacturing units at Nagothane town in Maharashtra. Shareholding. The  number of shares of RIL are approx. 644.51 crore (6.44 billion). The promoter group, the Ambani family, holds approx. 49.38% of the total shares whereas the remaining 50.62% shares are held by public shareholders, including FII and corporate bodies. Life Insurance Corporation of India is the largest non-promoter investor in the company, with 7.98% shareholding. In January 2012, the company announced a buyback program to buy a maximum of 12 crore (120 million) shares for ₹10,400 crore (US$1.5 billion). By the end of January 2013, the company had bought back 4.62 crore (46.2 million) shares for . Listing . The company's equity shares are listed on the National Stock Exchange of India Limited (NSE) and the BSE Limited. The Global Depository Receipts (GDRs) issued by the company are listed on Luxembourg Stock Exchange. It has issued approx. 5.6 crore (56 million) GDRs wherein each GDR is equivalent to two equity shares of the company. Approximately 3.46% of its total shares are listed on Luxembourg Stock Exchange. Its debt securities are listed at the Wholesale Debt Market (WDM) Segment of the National Stock Exchange of India Limited (NSE). It has received domestic credit ratings of AAA from CRISIL (S&P  subsidiary) and Fitch. Moody's and S&P have provided investment grade ratings for international debt of the company, as Baa2 positive outlook (local currency issuer rating) and BBB+ outlook respectively. On 28 December 2017, RIL announced that it will be acquiring the wireless assets of Anil Ambani-led Reliance Communications for about ₹23,000 crores. Operations. The company's petrochemical, refining, oil and gas-related operations form the core of its business; other divisions of the company include cloth, retail business, telecommunications and special economic zone (SEZ) development. In 2012–13, it earned 76% of its revenue from refining, 19% from  petrochemicals, 2% from oil & gas and 3% from other segments. In July 2012, RIL informed that it was going to invest US$1 billion over the next few years in its new aerospace division which will design, develop, manufacture, equipment and components, including aircraft, engine, radars, avionics and accessories for military and civilian aircraft, helicopters, unmanned airborne vehicles and aerostats. On 31 March 2021, the company had 347 subsidiary companies and 150 associate companies. Digital Fibre Infrastructure Trust (InvIT). Reliance Industrial Investments and Holdings owns Digital Fibre InvIT, which in turn owns 51% of Jio Digital Fibre Private Limited. The  remaining 49% in Jio Digital Fibre Private Limited is owned by Reliance Industries directly. Jio Digital Fibre Private Limited holds all fibre optic assets of the telecom operations of the group. Former holdings. On March 2017, Reliance Industries Ltd (RIL) completed the sale process of its 76% equity stake in Mauritius-based oil retailer Gulf Africa Petroleum Corp (GAPCO) to Total Marketing & Services, a subsidiary of French oil and gas firm Total SE. The East West Pipeline has been acquired by India Infrastructure Trust, which is owned by Brookfield Asset Management for a consideration of ₹13,000 cr. Employees. As  on 31 March 2018, the company had 29,533 permanent employees of which 1,521 were women and 70 were employees with disabilities. It also had 158,196 temporary employees on the same date which makes a total of 187,729 employees. As per its Sustainability Report for 2011–12, the attrition rate was 7.5%. But currently, the same attrition rate has gone up to 23.4% in March 2015 as per latest report released by the organisation. In its 39th Annual General Meeting, its chairman informed the shareholders of the investment plans of the company of about in the next three years. This would be  accompanied by increasing the staff strength in Retail division from existing strength of 35,000 to 120,000 in next 3 years and increasing employees in Telecom division from existing 3,000 to 10,000 in 12 month Criticism and controversies. De-merger of RIL in 2005–2006. The Ambani family holds around 45% of the shares in RIL. Since its inception, the company was managed by its founder and chairman Dhirubhai Ambani. After suffering a stroke in 1986, he handed over the daily operations of the company to his sons Mukesh Ambani and Anil Ambani. After the death of Dhirubhai Ambani in 2002, the  management of the company was taken up by both the brothers. In November 2004, Mukesh Ambani, in an interview, admitted to having differences with his brother Anil over 'ownership issues'. He also said that the differences "are in the private domain". The share prices of RIL were impacted by some margin when this news broke out. In 2005, after a bitter public feud between the brothers over the control of the Reliance empire, mother Kokilaben intervened to broker a deal splitting the RIL group business into the two parts. In October 2005, the split of Reliance Group was formalised. Mukesh  Ambani got Reliance Industries and IPCL. Younger brother Anil Ambani received telecom, power, entertainment, and financial services business of the group. The Anil Dhirubhai Ambani Group includes Reliance Communications, Reliance Infrastructure, Reliance Capital, Reliance Natural Resources and Reliance Power. The division of Reliance group business between the two brothers also resulted in de-merger of 4 businesses from RIL. These businesses immediately became part of Anil Dhirubhai Ambani Group. The existing shareholders in RIL, both the promoter group and non-promoters, received shares in the de-merged companies. Relationship with ONGC. In May 2014, ONGC moved to Delhi High Court  accusing RIL of pilferage of 18 billion cubic metres of gas from its gas-producing block in the Krishna Godavari basin. Subsequently, the two companies agreed to form an independent expert panel to probe any pilferage. Nepotism. "Seminar" magazine (2003) detailed Reliance founder Dhirubhai Ambani's proximity to politicians, his enmity with Bombay Dyeing's Nusli Wadia, the exposes by the Indian Express and Arun Shourie about illegal imports by the company and overseas share transactions by shell companies, and the botched attempt to acquire Larsen & Toubro. As early as 1996, "Outlook" magazine addressed other controversies related to fake and  switched shares; insider trading; and a nexus with the state-owned Unit Trust of India. Five main allegations concerning Reliance, and which have plunged the Indian capital markets into a period of uncertainty unsurpassed since the days of the securities scam were: NICL. The Central Bureau of Investigation (CBI) filed a chargesheet in a Mumbai court against Reliance Industries Limited (RIL) and four retired employees of National Insurance Company Limited (NICL), including a former CMD, under provisions of the Prevention of Corruption Act for criminal conspiracy and other charges. Acting on a reference from CVC in March 2005, the CBI  started probing the conspiracy that led to the filing of the chargesheet on 9 December 2011. The 2005 complaint had alleged irregularities in issuance of insurance policies — for coverage of default payments — by NICL to RIL. Chargesheet also mentioned criminal offences with dishonest intention and causing wrongful loss totalling ₹147.41 crore to NICL and wrongful gain to the private telecom provider. Two retired senior officials of National Insurance Company Limited and 11 others were awarded varying jail terms by a Delhi court in Jan 2014. RIL plane grounded. A business jet owned by Reliance Industries (RIL) was grounded by  The Directorate General of Civil Aviation (DGCA) on 22 March 2014 during a surprise inspection, for carrying expired safety equipment on board; its pilot was also suspended for flying without a licence. Krishna Godavari (KG) Basin gas. The Reliance Industries Limited (RIL) was supposed to relinquish 25% of the total area outside the discoveries in 2004 and 2005, as per the Production Sharing Contract (PSC). However, the entire block was declared as a discovery area and RIL was allowed to retain it. In 2011, the Comptroller and Auditor General of India (CAG) criticised the Oil Ministry for this decision. The  CAG also faulted RIL for limiting the competition in contracts, stating that RIL awarded a $1.1 billion contract to Aker on a single-bid basis. Petition against Reliance Jio. A PIL filed in the Supreme Court by an NGO Centre for Public Interest Litigation, through Prashant Bhushan, challenged the grant of pan-India licence to RJIL by the Government of India. The PIL alleged that RJIL was allowed to provide voice telephony along with its 4G data service, by paying an additional fees of just INR16580 million (US$280 million) arbitrary and unreasonable, and contributed to a loss  of INR228420 million (US$3.8 billion) to the exchequer. The CAG in its draft report alleged rigging of the auction mechanism, whereby an unknown ISP, Infotech Broadband Services Pvt Ltd, acquired the spectrum by bidding 5000 times its net worth, after which the company was sold to Reliance Industries. Future Retail deal and possession. In February 2022, Reliance terminated the leases of hundreds of Future Retail locations, the next largest retail chain in India, and took possession of those brick-and-mortar shops. Future Retail had a deal to sell its assets to Reliance, but that deal was contested by  Amazon.com, which in 2019 acquired a stake in a subunit of Future Retail along with certain rights with respect to the transfer of the retailer's assets. Reliance's possessions came after rounds of legal wrangling, including a 2020 arbitration in Singapore and an antitrust review by the Competition Commission of India. External links.