Reliance Industries: Setting New Benchmarks

Reliance Industries (RIL) is India’s largest and most profitable private sector company. It is not just India’s largest company by market capitalisation (Rs 17,81,841 crore), by revenue (Rs 7,92,756 crore), and by profitability (Rs 67,845 crore). It is also one of the largest contributors vis-à-vis exports (Rs 2,54,970 crore), job creation (2,32,822 new jobs created during the year), and CSR spends (Rs 1,186 crore). It is, therefore, no surprise that RIL dominated the BW Real 500 rankings for the past so many years. This year, like the one before, it has slipped to the second place basis lower income when compared to Indian Oil, in the BW Real 500 list. On every other count, RIL is most certainly the country's largest and most profitable private sector company. 

On why RIL continues to dominate the corporate sector, Mukesh D. Ambani, Chairman and Managing Director, RIL explained to the shareholders at a recent AGM. "Reliance has maintained its leadership position among Indian corporates for nearly three  decades now. It is Reliance’s ability to innovate, to build in unparalleled flexibility, to transform itself from time to time and the great conviction in India’s capability to compete globally at world-scale, which has helped the company stay at the top and continue making newer records," he said. 

Record Earnings

During the year, Reliance was able to overcome all the pandemic-led difficulties to post stellar performance operationally as well as financially with strong contribution from all its businesses. Both the consumer businesses, Retail and Digital Services, recorded highest ever revenues and EBITDA. The E&P business also posted significantly higher numbers with strong volume growth and improved realisations, the chairman said. Reliance posted a record high EBITDA of Rs 1,25,687 crore on a consolidated basis for FY2021-22, which was 28.8 per cent up from the previous year. The consolidated net profit for the year stood at Rs 67,845 crore – again a new record. 

RIL said it continued to manage its treasury operations actively and efficiently to reduce interest burden and lengthen maturities. At the beginning of FY22, RIL made history by raising a jumbo loan of $4 billion on better terms than any corporate in the Asian region with similar credit profile. It was the largest-ever foreign currency bond issuance from India, with the lowest coupon rate for benchmark 30-year and 40-year issuances by a private sector BBB corporate from Asia excluding Japan. "Similarly, the company paid Rs 30,791 crore to the government towards its 15 years of future spectrum dues to save on annual interest cost burden," said Ambani. 

Referring to the financials for 2020-21 (FY21), Ambani, in his letter to the shareholders, said, "In a volatile environment, Reliance generated an EBITDA of Rs 97,580 crore ($13.3 billion), which is 4.6 per cent lower than last year. Diversified earnings stream and resilient consumer businesses helped the company navigate through the unprecedented pandemic headwinds."

Offline-online Boom

RIL's retail business continued to expand in FY22 offline as well as online. It added nearly 8 million sq ft of retail space taking its total retail space to over 41.6 million sq ft. Besides, the business added 11.1 million sq ft of warehousing space during the year. Importantly, the business created more than 1,50,000 jobs through the year. It posted a revenue of Rs 1,99,749 crore, up nearly 27 per cent. 

The digital business expanded as well. Jio Fiber became the number one fibre-to-home provider in India with over 5 million connected homes. The digital business clocked a revenue of Rs 1,00,161 crore, up 11 per cent. 

RIL also created shared value by reinvesting Rs 1,06,481 crore in the group to maintain and develop operations while contributing Rs 1,88,012 crore to the national exchequer.