Reliance announces key announcement: Separate company to be formed for oil-to-chemical business

The country’s most valuable company and Mukesh Ambani-led Reliance Industries Limited (RIL) has announced a demerger framework in its oil-to-chemicals business wholly-owned entity. For this, the company has sought approval from shareholders and lenders. The company hopes to get approval for this by the second quarter of the coming financial year.

This is how the company will benefit

Mukesh Ambani’s move will help the company attract global investors like Saudi Aramco. In its information to the exchanges, the company said that the restructuring of the oil-to-chemicals business would allow it to take advantage of opportunities in the Otusi value chain. Reliance Industries is setting up a separate entity for the oil-to-chemicals business. The move will help it pursue growth opportunities with strategic partners.

The strong rise in Reliance’s stock

Since then, the stock of Reliance has continued to rise strongly. After opening at the level of 2048, it was up 29.10 points (1.45 percent) at 2045.20 at 11.45 am today. It closed at the level of 2008.10 on the previous trading day. Currently, the company has a market capitalization of Rs 13.40 lakh crore. That is, it is the largest company in the country in terms of market capitalization.

Negotiations with the world’s largest oil company

For a long time, Reliance Industries Limited was in talks with Saudi Aramco, the world’s largest oil company, to sell a 20 percent stake. But the deal was halted due to the coronavirus epidemic. The company’s oil-to-chemicals business was valued at $ 75 billion. Mukesh Ambani, chairman of Reliance Industries’ 43rd AGM held on 15 July 2020, said that the proposed deal with Saudi Aramco was not being completed in time due to the unprecedented circumstances created by the Kovid-19 epidemic. But we respect our more than two decades of business relations with Saudi Aramco and are committed to a long-term partnership with it.