Mukesh Ambani-led Reliance Industries (RIL) is geared for growth on the back of a strong balance sheet after slashing debt, raising capital, and on boarding strategic investors in 2020-21.
Addressing shareholders in the Integrated Annual Report 2020-21, company Chairman and Managing Director Mukesh Ambani said, “Strong operating cash flow and largest ever capital raise further strengthened our balance sheet, enabling us to deleverage and meet our net-debt zero commitment ahead of stated timeline. We now have a strong balance sheet, with high liquidity that will support growth plans for our three hyper-growth engines — Jio, Retail, and oil-to-chemicals (O2C),” he said.
Ambani said RIL completed India’s largest ever rights issue of Rs 53,124 crore (subscribed 1.59x), which is also the largest in the world by any non-financial institution in the past 10 years. During the year, Jio Platforms and Reliance Retail raised Rs 1.52 trillion and Rs 47,265 crore, respectively, from strategic and financial investors, including Facebook and Google.
Energy major BP also invested Rs 7,629 crore for a 49 per cent stake in RIL’s fuel retailing business. RIL made a pre-payment of $7.8 billion of long-term foreign currency debt, with requisite approvals from the RBI. This is the highest ever pre-payment of debt undertaken by any corporate borrower in India, he added.
Among various measures to help the fight against coronavirus, RIL said it has submitted a proposal for the application of niclosamide as a potential drug against Covid-19. Commenting how RIL’s telecom vertical Jio fared during the first wave of the Covid-19 pandemic, Ambani said, “Higher acceptance of digital services reflects in 27 per cent year-on-year (YoY) growth in Jio’s total data traffic to 1,668 crore GB.”
Ambani said Jio’s high-speed connectivity services enabled millions of Indians to work from home, study from home, shop from home.
Charting the way ahead with eyes on 5G technology, he said, “We are also excited with the development of a new generation Cloud native 5G RAN technology that is truly open, and software defined. Qualcomm and Jio successfully tested 5G solutions in India, achieving the 1 Gbps milestone on the Jio 5G solution.”Sharing insight on how the O2C business fared, Ambani said, “Agile business operations through the Covid-19 crisis enabled Reliance to operate its O2C facilities at near 100 per cent by shifting products to export markets. High operating levels helped RIL meet commitments to suppliers, vendors, and consumers, ensuring continuity of operations for the ecosystem.”“For downstream products, demand destruction in automotive, housing and construction, consumer durables were partially offset by heightened demand from health and hygiene, packaging, and e-commerce.
Business environment for the O2C segment improved sharply in the second half of the year with gradual easing of lockdowns and revival in economic activities, resulting in demand recovery to near pre-Covid levels by the end of the year. Margin environment also improved in the second half of the year with rising demand and supply disruptions,” he added.
Ambani also said Reliance Retail’s business was impacted by restrictions with 80 per cent stores operational and lower footfalls which were at 65 per cent of last year. Despite the turmoil, 1,456 new stores were launched, taking the total store count to over 12,700.
He added JioMart continues to grow in scale with more traffic, active users, and orders and rapid scale-up of digital commerce solutions, including JioMart.