Reliance Industries Poised for Upgrade as Moody's Reviews Credit Rating

Strategic Insights -

Reliance Industries, the Fortune-500 conglomerate, is set to benefit from a possible upgrade by Moody's Investors Service, a global credit agency. The upgrade, triggered by the company's demerger of finance, telecom, and power businesses, could enable Reliance to raise funds at a lower cost, thereby reducing its expenses. The company has ambitious expansion plans, including a Rs 467 billion (US$10.8 billion) investment in refinery, petrochem, oil, and gas exploration in India and abroad, as well as a foray into the life science segment.

Key Takeaways:

  • Reliance Industries is likely to receive an upgrade from Moody's Investors Service, following the demerger of its finance, telecom, and power businesses.
  • The possible upgrade could enable the company to raise funds at a cheaper rate, reducing its costs.
  • Reliance has ambitious expansion plans, including a Rs 467 billion (US$10.8 billion) investment in refinery, petrochem, oil, and gas exploration in India and abroad.
  • The company plans to invest Rs 250 billion to double its refining capacity in Jamnagar to 60 million tonnes per annum by 2008-09.
  • Reliance will invest another Rs 176 billion in 4-5 years for upstream oil and gas exploration and production.
  • The company aims to enhance its polyester capacity to 2 million tonnes per annum and hike polypropelene capacity to 1.43 million tonnes per annum by March 2006.
  • Reliance's revenues touched Rs 660 billion, and profits crossed Rs 75 billion in the last fiscal year.

Statistics:

  • Rs 467 billion (US$10.8 billion): Reliance's planned investment in refinery, petrochem, oil, and gas exploration in India and abroad.
  • 60 million tonnes per annum: Reliance's proposed refining capacity in Jamnagar by 2008-09.
  • Rs 250 billion: Reliance's planned investment to double its refining capacity in Jamnagar.
  • Rs 176 billion: Reliance's planned investment in upstream oil and gas exploration and production.
  • Rs 30 billion: Reliance's planned investment in enhancing polyester capacity to 2 million tonnes per annum.
  • Rs 11 billion: Reliance's planned investment in hiking polypropelene capacity to 1.43 million tonnes per annum.
  • Rs 660 billion: Reliance's revenues in the last fiscal year.
  • Rs 75 billion: Reliance's profits in the last fiscal year.

Sources:

  • Reliance Industries (BSE:500325) press release
  • Moody's Investors Service statement
  • PTI (Press Trust of India) news article