Cash-rich RIL to scout for overseas energy acquisitions
17 Oct 2011
Armed with $12.6-billion in cash, Mukesh Ambani's Reliance Industries Ltd (RIL) is expected to aggressively expand its interests in telecommunications, retail and financial services, besides considering making acquisitions in the global energy sector.
Analysts expect the group to pursue an aggressive policy in widening its base in telecommunications and financial services, two new areas for RIL, controlled by the elder Ambani.
In May 2010, the two brothers – Mukesh and Anil, sons of Reliance group founder, the late Dhirubhai Ambani – ended a bitter fight over their father's empire by scrapping the non-compete agreement that they had signed earlier.
The move allowed Mukesh Ambani's RIL to foray into telecommunications and financial services, where younger brother Anil has a strong presence through Reliance Communications and Reliance Capital respectively.
On Saturday, RIL reported a 16-per increase in its net profit, which shot up to Rs5,703 crore, for the second quarter of the fiscal ending 30 September. ''Reliance has a strong balance sheet and sustained earning base to pursue growth opportunities,'' said Ambani, 54, noting that its cash had soared to $12.6 billion after the sale of a 30-per cent stake in 21 of its oil and gas fields to British Petroleum for $7.2 billion last year.
The company has been experiencing declining output from its Krishna-Godavari (KG) D6 field in Andhra Pradesh. Both Reliance and BP have now sought the government's nod to develop smaller fields to make up for declining production.
