An advertisement featuring Bollywood actor Shah Rukh Khan for Reliance Jio. (Photographer: Dhiraj Singh/Bloomberg)

Refining Business To Fund Reliance Industries’ Spending On Jio

Mukesh Ambani-controlled Reliance Industries Ltd., will be relying on profit from its core refining and petrochemicals business to help its latest venture.

A large chunk of the fresh investments will be in Reliance Jio Infocomm Ltd., said the group’s strategy head, Anshuman Thakur. The company, which has already invested Rs 1.79 lakh crore in Reliance Jio, will be pumping in close to Rs 18,000 crore by the end of June, added Thakur. RIL plans to invest a similar amount collectively across all its other business segments in the full financial year 2017-18.

The company’s net profit rose 1.6 percent in the fourth quarter over the previous three months, beating forecasts for the seventh time in a row. The company reported a gross refining margin (GRM) of $11.5 per barrel for the March ended quarter as against $10.8 per barrel in October-December, it said in a media release. This is the ninth consecutive quarter for the company to report a double digit GRM.

Refining Business To Fund Reliance Industries’ Spending On Jio

Telecom Business

Reliance Jio Infocomm Ltd., the wholly owned telecom subsidiary of RIL, had signed up at least more than 72 million paid subscribers on its network at the end of March 2017, said the group’s chief financial officer Alok Agarwal.

The telecom operator, which only started charging its customers after April 1, 2017, wrote down nearly Rs 12,000 crore from its net worth. It reported a loss of Rs 22.5 crore for the last six months of the financial year.

RIL claims that there has been a "noteworthy improvement" in the interconnectivity issues with other incumbent telecom operators in the country.

Petrochemicals Business

Revenue from the petrochemicals business increased 15.8 percent sequentially to Rs 26,478 crore. Petrochemicals margins contracted by 140 basis points to 13 percent.

The petrochemicals business also recorded the highest ever earnings before interest and tax of Rs 3,441 crore. Production of petrochemicals remained flat at 6.2 million metric tonnes in the previous quarter.

Oil and Gas Business

The oil and gas segment saw its revenue rise 7.7 percent to Rs 1,309 crore from Rs 1,215 crore in the same quarter of the previous year. Reliance Industries' KG-D6 basin produced 0.28 million barrels of crude oil in the fourth quarter, declining 15 percent from a year ago. The production of natural gas too declined 25 percent year on year to 23.4 billion cubic feet.

The Panna-Mukta and Tapti fields produced 1.44 million barrels of crude oil, a reduction of 20 percent from the same period of the last year. Natural gas production fell 18 percent on a yearly basis to 14.8 billion cubic feet.

RIL commenced commercial production from its coal methane bed blocks, after the Cabinet Committee for Economic Affairs gave marketing and pricing freedom for CBMs. Reliance has begun the process of price discovery for CBM gas, the release said.

Retail Business

The organised retail business saw revenue grow by 18.9 percent on a quarterly basis to Rs 10,332 crore. A growth in digital, fashion and lifestyle and petroleum products led the increase in turnover.