RIL’s treasury operations rake in 38% of its annual profit at nearly Rs8,000 crore

Reliance Industries is not just another polyester-to-petroleum-to-retail conglomerate, it also knows how to make best use of its huge, 83,000-crore, cash pile. RIL earned a whopping Rs7,998 crore, or about 38 per cent of its net profit of Rs21,000 crore, through investments in financial markets during the 2012-13 fiscal.

In fact, RIL saw its treasury income grow at a higher pace of 29 per cent to Rs7,998 crore from the Rs6,192 crore reported in FY'12, against the marginal 4.8 per cent year-on-year growth in total net profit.

While announcing its results for the fourth quarter and fiscal 2012-13, RIL had reported other income to the tune of Rs7,998 crore while showing an annual net profit of Rs21,003 crore for the fiscal.

During the fiscal, RIL incurred financing cost of Rs 3, 036 crore, while net income from treasury operations stood at Rs7,998 crore – a net earning of Rs 4,962 crore.

During the fiscal, RIL also raised around Rs8,200 crore in debt, including $800 million through 5.875 per cent perpetual bonds.

RIL chief financial officer Alok Agarwal said the entire amount classified under `other income' came from the treasury operations.

Agarwal said RIL is also working on a massive expansion of its financial services arm, launched last year as an equal joint venture with DE Shaw of the US, to undertake proprietary trading business by launching a full-fledged brokerage arm.

RIL and the D E Shaw group had, in March 2011, agreed to establish a joint venture financial services business in India. This could also have been a prelude to RIL seeking to enter banking business under RBI's policy of licensing a few private banks.