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Reliance plans $30 billion investment in three years

Chairman Mukesh Ambani, India’s richest man, also said the energy giant would start offering high-speed 4G telecommunications services next year as it diversifies into new areas to build revenues.

“The next two years... will see us focused on executing and progressively bringing these projects on-stream in petrochemicals, refining, retail and Jio,” Ambani said at the company’s annual general meeting in Mumbai.

“2016-17 will be the first full year in which the complete benefits of all these investments will be available to our shareholders, consumers and the society,” he said.

Reliance Jio, the conglomerate’s telecoms arm, hopes to launch 4G mobile and broadband services in 2015 in India, one of the world’s biggest markets for mobile services adding millions of new consumers each year.

Ambani told shareholders that Reliance was investing around $12 billion in the telecoms business and the firm should see returns soon.

The owner of the world’s largest oil refining complex, Reliance receives most of its revenues from its energy empire but in recent years it has ventured into new businesses.

Its retail arm has also grown to become the country’s largest supermarket chain.

Ambani also announced the appointment of his wife, Nita, to the firm’s board, after a new law stipulated that listed companies must have a female director. Several top firms have also opted for family members.

Reliance shares on the Bombay Stock Exchange reacted little to the announcements and were down 1.48 per cent at Rs1,073.80 rupees. “Ambani’s focus on telecom and the non-oil businesses stand out in his speech this year,” said P. Phani Sekhar, a Mumbai-based fund manager at Angel Broking Ltd, which owns Reliance shares.

“Non-oils will define Reliance over the next five years. But the market wants quick results, and a three-to- five-year timeframe doesn’t excite investors too much.”

Reliance’s shares fell as much as 2.2 per cent to Rs1,066.60 and traded at Rs1,071 as of 1:10pm in Mumbai. The stock had risen as much as 1.1 per cent just after Mukesh Ambani began his address. The benchmark S&P BSE Sensex, on which Reliance has the highest weighting, declined 1.2 per cent.

Four years ago, Mumbai-based Reliance had paid Rs48 billion to gain control of Infotel Broadband Services Ltd, just hours after bidding for nationwide wireless broadband licenses. It later said it will use a fourth-generation technology called long-term evolution, or LTE, to offer wireless broadband services.

“The boundaries of these startups and services are only limited by our imagination,” Ambani said. “Digital infrastructure and digital services have the potential to add significantly to India’s GDP growth.”

Reliance’s investments in telecommunications and other non- energy businesses, including retail, come as natural gas production from its biggest deposit wanes.

The company and its partner BP Plc, which owns 30 per cent of the KG-D6 block off India’s east coast, are waiting for the government to increase local gas prices after a decision was deferred on orders of the nation’s Election Commission in March. India has a new government following general elections last month.

Reliance and state-run explorers including Oil & Natural Gas Corp would benefit from the gain in rates, which currently stand at $4.20 per million British thermal units.

Reliance operates two refineries, with a combined capacity of 1.24 million barrels a day, located next to each other at Jamnagar in the western state of Gujarat. They have the ability to process cheaper, lower grades of crude into high-value products for use in Europe and the US.