This is the fourth investment cycle, and it will differ from the company’s previous investment cycles in many ways and may also face energy bottlenecks
Reliance Industries (RIL) in its fourth investment cycle could help double its earnings by spending USD 50 billion over the next three years, as per a report by Morgan Stanley report. If push comes to shove, its profit is likely to double by 2027. This is the fourth investment cycle, and it will differ from the company’s previous investment cycles in many ways and may also face energy bottlenecks.
Reliance Industries plans to spend this amount on its chemicals, 5G services, retail business and new energy business over the next three years. In its first investment cycle in the late 90s and early years of the new century, Reliance focused on the petrochemicals business. The second investment cycle, which began four years later, focused on refining and developing the oil and gas sectors. The third investment cycle focused entirely on telecom services.
According to a Morgan Stanley report, past investment cycles have contributed USD 60-70 billion to shareholder value creation as the company takes aggressive steps to reshape its earnings pattern for the next decade. The report says that Reliance is in a better position for the next investment cycle with a provision to spend USD 50 billion within three years and USD 75 billion by the year 2027.
One-third of this huge investment will go to the energy and new energy business, while the telecommunications and retail business will get the rest. However, investment in retail, telecommunications and new energy is likely to see a greater thrust within the next two years. Investment will be made on setting up 5G network in telecom. Whereas, investment in new energy business will be mainly on solar panels. Apart from building a strong logistics network of the company in the retail business, the emphasis is likely to be on increasing e-commerce activities