RIL Focusing On “Emerging” Sectors For Investment: Analysts

Reliance Industries Limited (RIL) intends to focus aggressively on the emerging sectors – telecommunication/internet and retail, in the next five years. According to a study by financial analysts, the Mukesh Ambani led RIL will put these  sectors on the fore with an annual investment of 6,500 crore each year.  The telecommunication and retail sector will see an investment of around 2,700 crore and 3,800 crore each year, respectively.

The investment plans for 2013-14 are not disclosed yet from the official sources. Analysts believe the core sectors viz. oil, gas, refining and petrochemicals will see an influx of a whooping investment of $28 billion (INR 151,000 crore) during the course of next five years. RIL is supposedly investing huge amount in all the sectors comprising of oil & gas, petrochemical, refining, retail and telecommunication. The investment in the retail sector is expected to break records and take a lead ahead of the telecommunication sector in less than a month’s duration.

RIL’s retail annual turn-over has grown to 44 percent by the end of December 2012. Analysts foresee an annual growth rate of 30 percent each year in the retail sector for the upcoming five years. The total investment of 19,500 crore in this retail sector is thus just nick in time.  Also, Reliance Industries Limited is planning to expand its’ retail business. Currently there are 1400 stores of Reliance Retail across the country catering in domains like food, clothes, jewelry, shoes, home and electronic appliances. These retail stores have a yearly growth of 10 percent in garments and 25 percent in food. The total retail space owned by the country’s biggest company is around 8 million sq.ft. of area at present.

The investment in telecommunication sector will be used to set up the infrastructure for a tower company. The stake of a foreign partner in this tower company is still elusive. Some media reports, suggest that AT&T and RIL may strike a deal on this, but nothing has been officially stated yet. From the investment figures it is evident that these new emerging sectors will be now working as the growth engines for the next five years.