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Mukesh Ambani’s Reliance is coming out of a series of long and intensive capex cycles with massive investments in hydrocarbons and telecom.
Mukesh Ambani led Reliance Industries invested more than Rs 1045006 crore in the last decade with a massive push for hydrocarbon and telecom businesses, Goldman Sachs revealed in its latest report. The investment management firm suggests that the firm of India’s richest man will be spending on relatively less capex-heavy segments in the next three years. Mukesh Ambani’s Reliance is coming out of a series of long and intensive capex cycles with massive investments in hydrocarbons and telecom. The report by Goldman Sachs suggests that Reliance Industries will be investing in retail and upstream new energy business in the next three years.
“We believe the businesses RIL is investing more in the next 3 years (retail and upstream new energy) are relatively less capex heavy, higher in returns and have a shorter gestation period,” the report said.
“The company has invested nearly USD 30 billion between FY13-18 to increase scale, integration and cost competitiveness of the O2C (oil to chemical) business, and close to USD 60 billion between FY13-24E in 4G/5G capabilities to create a high-growth telecom business,” Goldman Sachs said in its detailed report on Reliance.
Now that the nationwide deployment of 5G across India seems to be finalized and with possible increases in telecom tariffs on the horizon, it is anticipated that the telecom industry will transform into a robust free-cash-flow (FCF) generating sector, complementing the current cash cow, O2C (comprising mega oil refinery and petrochemical complexes).
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