Mukesh Ambani, chairman of Reliance Industries (Photographer: Adam Berry/Bloomberg)

$4 Billion Shopping Spree Maps Ambition of India’s Richest Man

(Bloomberg) -- Reliance Industries Ltd., India’s second-largest company by market value, has been on a shopping spree this past year, with a focus on expanding the draw of its consumer offerings.

Helmed by India’s richest man Mukesh Ambani, the company has struck at least 12 deals over 12 months with an estimated tab of about 289 billion rupees ($4.2 billion), according to calculations by Jefferies Group LLC and Bloomberg. Ten of these are related to his consumer business. Ambani has also capitalized on India’s ongoing bad-debt issues with purchases of distressed or insolvent companies including a local textile-maker, a carbon-fiber firm and the wireless assets of an indebted telecom company.

For a conglomerate better known for building massive projects including the world’s largest refining complex, this recent acquisitive streak reflects Ambani’s ambition to make his telecom, retail and media offerings as profitable as the legacy petrochemicals and refining businesses. It also traces his pivot toward building an integrated digital offering around carrier Reliance Jio Infocomm Ltd. with purchases in the entertainment and artificial intelligence-based education space.

Some of these acquisitions are basically Reliance “trying to grab content,” said Deven Choksey, managing director at Mumbai-based KR Choksey Shares and Securities Pvt. “If they end up generating enough content, you can be reasonably sure that users will come on their network.”

Ambani has also been able to cherry pick debt-laden assets as local lenders scramble to resolve their $210 billion in stressed loans, Choksey said.

Click here for more on how India’s bankruptcy law may spur M&A heyday

When Ambani, 61, rises to address shareholders in Mumbai on Thursday analysts are expecting to hear more on how the group will further integrate retail and telecom.

Clear e-commerce plans, possibly at the annual shareholder meeting, could become a driver for re-rating the stock, brokerage CLSA said in a July 3 report. Ambani may announce the commercial launch of JioFiber, the fibre-to-the-home broadband service, Business Today reported. The service has the potential to alter the segment’s competitive landscape, credit rating company S&P Global Ratings has said.

Reliance has committed about $1.3 billion to acquisitions in the two years through to March 31, 2019, Jefferies India analysts led by Somshankar Sinha estimated in a report on Tuesday. The count excluded the Rhea Retail Pvt. Ltd. deal and a proposed 173 billion-rupee acquisition of spectrum, mobile-phone towers and fiber assets from Reliance Communications -- the largest among recent transactions.

Overall, Reliance has invested about $53 billion in a range of businesses from telecom, retail and petrochemicals to real estate. Telecom alone has sucked up more than $36 billion. Debt has climbed three-fold over five years to about $32 billion at the end of March.

Shopping Cart

TargetWhenSectorDeal Size*
Kemrock IndustriesJune, 2017Advanced CompositesWon e-bidding conducted by Allahabad Bank with 6.7b rupee offer; allows RIL to enter carbon fiber business
Balaji TelefilmsJuly, 2017Media & EntertainmentBought 24.9% for 4.13b rupees 
Reliance CommunicationsDec, 2017TelecomBought its spectrum, towers and fiber for 173b rupees
Indian Film Combine Pvt.Feb, 2018Real Estate, HospitalityBought 65% for 11.05b rupees
Eros InternationalFeb, 2018Media & EntertainmentBought 5% stake; will co-invest up to $150m to acquire and create content
SaavnMarch, 2018Online MusicAcquired & merged with JioMusic; combined entity valued at $1b
Genesis Luxury Fashion Pvt.March, 2018RetailBought 5% additional stake for 354m rupees
KaiOS Technologies Inc.March, 2018Telecom tech providerBought 16% stake for $7m
EmbibeApril, 2018Artificial Intelligence-based online education platformBought 72.7% stake for $180m
Rhea Retail Pvt. June, 2018Clothing for expectant mothers, infantsRIL’s unit bought 100% stake for 2.03b rupees
Alok IndustriesJune, 2018TextilesBought one of first 12 big insolvency cases for 50b rupees; 83% haircut for lenders reported
Radisys CorpJune, 2018U.S.-based Telecom Solutions ProviderPaid $75m for 100% stake; will aid Reliance Jio in rolling out 5G and Internet-of-Things

* if announced
Source: Company filings, statements, Jefferies report

©2018 Bloomberg L.P.

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