Reliance Journey Of Being The Worlds 2nd Most Valuable Energy Firm

PV Vyshnavi PV Vyshnavi
Sep 3, 2020 5 min read
Reliance Journey Of Being The Worlds 2nd Most Valuable Energy Firm

Reliance Industries Ltd has now overtaken the company Exxon Mobil to become the world’s second most valuable energy company after its market capitalization scaled to a record to a record high of over ₹14 trillion (14 lakh crore). This propels Mukesh Ambani to become the fifth wealthiest person on the planet with a net worth of $77.4 billion, a position previously filled by Steve Ballmer.

The logo of Reliance Industries.
The logo of Reliance Industries.

According to the stock market data, the conglomerate is now ranked 46thglobally on market. Its share price scaled to its highest of ₹2,163 before settling at ₹2,146.20 taking the company from its 48th position to 46th position. The ₹13.6 trillion market capital of Reliance along with ₹54,262 crore market capital from its partly paid shares that were traded separately puts the firms combined market value at ₹14.1 trillion or $189.3 billion. Reliance is the 10thhighest market capital company in Asia.

Besides being on a higher spot Exxonmobile, Reliance also is above Apple which has a market cap of $1.6 trillion, Microsoft at $1.5 trillion and Amazon a $1.48 trillion dollars. It is also is higher than Chevron, Oracle, Unilever, Bank of china and The SoftBank Group. At the 46th rank it is just below PepsiCo which has a market capital of 189.8 billion.


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Reliance Industries partly paid shares

The RelaincePP shares was first listed on stock exchanges on June 15th, 2020 is one of the reasons to why Relaince is the 2nd most valuable energy firm in the world. The ReliancePP or partly paid up shares have been issued in recently concluded in the rights issue have generated over 4.1 times more returns to investors in less than two months. Reliance raised a total of Rs 2,12,809 crore just through Rights Issue, investment of BP to its fuel retaining venture.

It added 115.9 billion to shareholder wealth within just four months giving the company the highest value creation in the world in such a short time, which was mostly because the record breaking fundraising from its digital unit, Jio Platforms. The firm also added $39 billion market value just within 5 weeks and 29 billion just from the last 14 trading sessions. The combined capital raised has no precedence globally in such a short time.


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The journey to the 2nd most valuable energy firm

The Reliance Group, is India’s largest private sector enterprise with businesses in thee energy and materials value chain. Founded by Dhirubhai Ambani the flagship company, Reliance Industries Limited is a fortune Global 500 company and has evolved from a textile company to a global leader in the materials and energy value chain businesses. It all started when Ambani started the yarn trading businesses in 1957 form a small 500sq.ft. Office in Mumbai. In 1996 Reliance went on to become the biggest textile brand “Only Vimal”

Reliance's growth to become the worlds 2nd energy company by value
Reliance's growth rate to become the worlds 2nd energy company by value
  • Reliance stands as the global leader when it comes to being the largest polyester yarn and fiber producer in the world and among the top five to ten producers in the world in major petrochemical products.
  • Reliance industries limited operates world class manufacturing facilities across the country at Allahabad, Barabanki, Dahej, Dhenkanal, Hazira, Hoshiarpur, Jamnagar, Kurkumbh, Nagothane, Nagpur, Naroda, Patalganga, Silvassa and Vadodara
  • The company works under different business segments such as Production, Petroleum Refining, Marketing, Petrochemicals, Textiles, Telecommunications and Retail.
  • The products and brands offered by the company are: LPG, Crude oil, Gasoline, High speed diesel, Aviation turbine fuel, Petroleum Coke, Sulphur, Fleet management services, Highway hospitality services, Vehicle care services, High and low density Polyethylene, Fleet management services, Highway hospitality services, Vehicle care services, different types of Yarn, etc.
  • The subsidiaries of Reliance are: Reliance Petroleum Limited, Reliance Industrial Investment and Holdings Limited, Reliance Ventures Limited,  Reliance Strategic Investments Limited Reliance Exploration and Production DMCC Reliance Global Management Services Limited, Reliance Commercial Associates Limited.
  • other subsidiaries being Reliance Fresh Limited, Retail Concepts and Services (India) Limited, Reliance Retail Insurance Broking Limited, Reliance Retail Finance Limited, Reliance digital Retail Limited, Reliance Retail Travel & Forex Services Limited, Reliance Trends Limited, Reliance Home Store Limited, Reliance Digital Media Limited, etc.

For a company who just started as a small textile company, Reliance has crossed several milestone to become a Fortune 500 company and now the 2nd most valuable energy firm in the company within a span of 3 decades.


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Reliance Turning Green

The Reliance industries has a 15 year vision to build itself as a new energy company that aims to recycle CO2 and create value from plastic waste and has an optimal mix of clean and affordable energy. While the oil to chemical conglomerate has more focused on consumer business in the recent times, but Reliance core which is oil to chemical business is well placed to generate sustained free cash flow.

Until demand normalizes Reliance Industries are looking to maximize throughout focus on the cost by leveraging deep petrochemical integration and continue to focus on domestic fuel Marketing. Future of O2C is new energy company and partnerships. It also intends to be a net carbon zero company by 2035. To achieve this, the company is also open to work with global financial investors, reputed technology partners and start-ups working on futuristic solutions.

This new energy business is based on the principle of carbon recycling and circular economy is a multi-trillion opportunity for India and the world. The brokerage said a key focus for Reliance Industries is renewable energy, and for that it intends to build an optimal mix of clean and affordable energy with hydrogen, wind, solar, fuel cells and battery. And intends to use technology, recycle CO2, create value from plastic waste.

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