Reliance Industries made history last week after it touched the revenue mark of $102 billion. It announced its Q4FY22 results, and FY22 revenue rose 47% to Rs 7.9 lakh crore led by strong growth in O2C (Oil to consumer) business and retail business. Net profit grew 26% YoY to Rs 67,845 crore but missed Forecaster estimates by 11.3%.
Investors were not too enthused by the results as the stock is falling for four consecutive sessions. Reliance's stock has been moving sideways for the past six months, with the uncertainty in global markets playing spoiler. During this time, some deals went sour and some went through. In November 2021, Reliance Industries and Aramco called off their $15 billion deal over valuation concerns.
Reliance moved on and signed an agreement with TA’ZIZ for a $2 billion chemicals project. The stock rose for three consecutive sessions after that. The stock closed 2021 at Rs 2,368.2, and Reliance New Energy (RIL’s subsidiary) acquired a 100% stake in Faradion. This acquisition was worth Rs 935 crore.
Reports suggest that Reliance has already spent almost $1 billion in 2022 from January – March, investing in industries like renewable energy, fashion, and e-commerce to diversify away from its fossil fuel business. It started 2022 with a $240 million investment in Dunzo. This deal was to strengthen Reliance Retail’s e-commerce platform.
Right after the Dunzo deal, Reliance signed an MoU (memorandum of understanding) with the Gujarat Government to invest Rs 5.9 lakh crore in green energy projects in Gujarat. The stock rose to Rs 2,539 on January 14, 2022. It is also foraying into the fashion business with Reliance Retail acquiring an 89% stake in Clovia for Rs 950 crore.
Although not an acquisition, Reliance Retail took over 947 stores of Future Retail. Reliance Retail now has access to more than 300 format stores which will strengthen its place in the retail business.
Reliance Industries and Viacom 18 partnered with Bodhi Tree Systems to form one of the largest TV and digital streaming companies. TV18 Broadcast, also the controlling partner in Viacom 18 owns more than 50 channels in India. Network 18 (TV18 Broadcast’s holding company) will be helpful in the distribution of digital media, once the Jio Cinema OTT app is transferred to Viacom 18. Reports suggest that Reliance is relying on acquisitions in various fields to fuel the company’s expansion. It’ll be interesting to see investor reactions as this strategy plays out.
