RIL to go big on investments in solar, 5G & retail

Following the chunky investment of ₹99,472 crore in FY22, Reliance Industries (RIL), the largest Indian company by market value, plans to ramp up its investments in solar, 5G and retail in this financial year. The conglomerate will continue with its acquisition spree to bridge the gaps in its renewable portfolio, while expanding the retail and digital businesses. It will also complete the final leg of the investments at KG Basin to start gas production from MJ field.

“RIL is likely to increase its investment by 30-40% in this financial year to continue scaling up its businesses,” said an executive. The capital expenditure for FY22 was nearly 25% higher than the previous year’s ₹79,667 crore. It has incurred an additional ₹45,880 crore towards the acquisition of spectrum by Reliance Jio Infocomm Ltd. The outstanding debt stood at ₹2,66,305 crore in March. After considering the cash and cash equivalents of ₹2,31,490 crore, the net debt of RIL stood at ₹34,815 crore.

Mukesh Ambani said in the recent financial result statement, “We are forging ahead with the development of our New Energy Giga Factories complex across 5,000 acres in Jamnagar.” Ambani is leaving no stone unturned in his quest to build four Giga factories, which will comprise an integrated solar photovoltaic module factory; an energy storage battery factory; an electrolyser factory for making green hydrogen; and a fuel cell factory for converting hydrogen into motive and stationary power.

RIL is accelerating global collaborations – especially in technologies to manufacture green hydrogen and storage battery and photovoltaic cells – before beginning construction of Giga factories. Reliance New Energy Solar Ltd (RNESL), a subsidiary of RIL, will invest ₹60,000 crore to build one of the largest integrated renewable energy manufacturing facilities in the world at Jamnagar, Gujarat by the year 2024.

Another focus area for investment is 5G and fibre to the home (FTTH). Kiran Thomas, president, Reliance Jio, said at the media briefing that the company is upgrading towards a pan India 5G rollout. “As far as possible, we try to further add value to our clients by offering a number of additional value-added services even within our basic tariffs. And if you look at our investments, all of these are feature-rich. We have a no-legacy network, which is continuing to improve, and we are upgrading towards a pan India 5G rollout,” he said. The management indicated that the performance of the fibre to home (FTTH) segment remains strong, with JioFiber reaching 5 million subscribers.

V Srikanth, Joint Chief Financial Officer, RIL, said, in retail, the company will continue to invest in structuring its brand portfolio offerings and capabilities. Reliance Retail crossed the 15,000-store benchmark. “We have been adding about seven stores a day. Our registered user base is now 193 million customers, which is up 24%,” he said.

MJ field development work is on track to commence production by December this year. Sanjay Roy, senior vice-president for exploration and production, said RIL is producing around 20% of India’s domestic production. “We expect to increase that to 30% with the commissioning of the MJ field in the next 15 to 18 months,” he added.

In 2021/22, RIL’s profit increased by 26.2% to ₹67,845 crore on gross revenue of ₹792,756 crore, up by 47%. However, the share price has fallen over 12 per cent in the last couple of weeks, when the benchmark index Nifty fell lesser at around 6%.