In the race to get hold of 31 percent stake of West Bengal government in Haldia Petrochemical, Reliance Industries Limited (RIL) may emerge as the most aggressive bidder. The stake has recently been put up on sale by the state government.
Mukesh Ambani owned Reliance Industries Limited (RIL) is focusing on expansion in its energy sector. RIL is sighted as the most affluent company looking for good investments and growth in comparison to the rest of the competitors. West Bengal government has promoted to sell their stake in Haldia Petrochemical and the Chatterjee Group. Other companies which have shown interest in gaining the stakes are: Oil and Natural Gas Corp, Indian Oil, GAIL, Cairn India and Jindal Steel & Power.
Haldia Petrochemical is a jackpot for its stake holder. It comes with huge losses and a high debt, but it still provides 22 % of the country’s total petrochemical needs and 60 % of the requirements in the eastern region of the country. It has been granted a special case stature by the government to overcome its energy crisis by waving of 5% of custom duty on the import of naptha, a key raw material to churn out petrochemical derivatives.
A state government official said cumulatively all these factors make Haldia a good catch for Reliance. This sale has come at an opportune moment for Reliance. MukeshAmbani had recently announced in the annual general meeting that the company is making its highest investment in history of Rs 1.5 lakh crore in its core business of petrochemicals, oil and gas. He also gave a detailed investment program to the shareholders’ in the meet. Winning a stake in Haldia Petrochem which is the biggest competitor for Reliance in the eastern region of the country can boost the productivity of the company. Apart from this RIL is also planning to expand its oil and natural gas well located in the KG-D6 basins in Bay of Bengal.According to a speculation by MukeshAmbani, RIL will become a major contributor to energy needs of the country that will reduce the country’s dependency on energy imports. Along with its European partner, BP, RIL is further planning to expand its productivity by deepening the current blocks of oil and natural gas. It has also received the legal nod to explore new areas for new discoveries of oil and natural gas reserves.