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RIL reorganisation clears deck for monetisation and stake sale in O2C biz: Complete Circle Consultants

Updated : February 23, 2021 06:13 PM IST

Reliance Industries Ltd expects to get the necessary approvals to hive off its oil-to-chemicals (O2C) business into a separate unit by the second quarter of the next fiscal year, the company said in a presentation to investors on Monday.

Gurmeet Chadha, Co-Founder & CEO of Complete Circle Consultants said that is extremely positive and clears the deck for monetization and stake sale in the O2C business.

“I think it clears the deck for moentisation and stake sale in the O2C business which we have been discussing off late. Also, it changes the narrative around Reliance. I think the energy business has been underrated in valuing Reliance and that will change the narrative,” he said in an interview with CNBC-TV18.

He said that green energy and petchem can significantly re-rate the business.

“There are two growth levers according to me. One is the petchem business. If you see the margins are at all-time high and Reliance currently O2C conversion is 24%. If you see Aramco, they have been doing a lot of petchem projects including investment in Saudi Basic Industries Corporation (SABIC) and one in Malaysia. So, this yield will go up and Reliance has the best feedstock flexibility in terms of taking advantage of it,” he said.

“You will see increased investments in green energy, in battery hydrogen. So, it will become a very dominant energy player in times to come,” he added.

Watch the video for more.

Disclaimer: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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