Reliance Industries Ltd. has struck at least 12 deals with an estimated tab of about 289 billion rupees over the last 12 months.
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 ($4.21 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.
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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.
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.
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Target When Sector Deal Size* Kemrock Industries June, 2017 Advanced Composites Won e-bidding conducted by Allahabad Bank with 6.7b rupee offer; allows RIL to enter carbon fiber business Balaji Telefilms July, 2017 Media & Entertainment Bought 24.9% for 4.13b rupees Reliance Communications Dec, 2017 Telecom Bought its spectrum, towers and fiber for 173b rupees Indian Film Combine Pvt. Feb, 2018 Real Estate, Hospitality Bought 65% for 11.05b rupees Eros International Feb, 2018 Media & Entertainment Bought 5% stake; will co-invest up to $150m to acquire and create content Saavn March, 2018 Online Music Acquired & merged with JioMusic; combined entity valued at $1b Genesis Luxury Fashion Pvt. March, 2018 Retail Bought 5% additional stake for 354m rupees KaiOS Technologies Inc. March, 2018 Telecom tech provider Bought 16% stake for $7m Embibe April, 2018 Artificial Intelligence-based online education platform Bought 72.7% stake for $180m Rhea Retail Pvt. June, 2018 Clothing for expectant mothers, infants RIL’s unit bought 100% stake for 2.03b rupees Alok Industries June, 2018 Textiles Bought one of first 12 big insolvency cases for 50b rupees; 83% haircut for lenders reported Radisys Corp June, 2018 U.S.-based Telecom Solutions Provider Paid $75m for 100% stake; will aid Reliance Jio in rolling out 5G and Internet-of-Things
* if announcedSource: Company filings, statements, Jefferies report
-Bloomberg