Hit by the fall in crude oil prices and demand for refined products, Reliance Industries Ltd (RIL) has reported a 37.2 per cent fall in net profit at Rs 6,546 crore for the quarter ended March 2020 as against Rs 10,427 crore in the same period a year ago. The board of RIL also approved a mega rights issue of Rs 53,125 crore — probably the largest in the corporate sector’s history — to shareholders.The board has priced the rights issue at Rs 1,257 per share in the share ratio of 1:15.
RIL’s revenue was down by 2.5 per cent at Rs 1,51,209 crore in the quarter from Rs 1,55,151 crore in the year-ago period. RIL’s subsidiary, Reliance Jio, posted a 177.5 per cent rise in net profit at Rs 2,331 crore during the March quarter as against Rs 840 crore a year ago.
RIL said the decrease in revenue is primarily on account of 10.1 per cent decline in refining and petrochemicals business revenues. The sharp fall of 20.5 per cent in average Brent oil price led to lower product price realization across the hydrocarbon chain. “This was partially offset by continuing growth in consumer businesses, even amidst the operational issues posed by the pandemic. Digital services and retail business recorded an increase of 30 per cent and 4.2 per cent, respectively, in revenue during the quarter,” it said.
Rs 1 lakh crore fund raising
RIL Chairman and MD Mukesh D Ambani, said: “Despite the daunting challenges arising from the fallout of the global pandemic, our company has once again delivered a resilient performance for FY 2019-20. Our O2C (oil to chemicals) businesses delivered sustained earnings due to its integrated portfolio, cost-competitiveness, feedstock flexibility and product placement capabilities. We continue to operate all our major facilities at near normal utilisation levels.”
RIL’s proposed rights issue will be its first in three decades. “The promoters have confirmed that in addition to subscribing to their aggregate entitlement in full, they will also subscribe to all the unsubscribed portion,” RIL said.
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