PRESENTATION ON.

RELIANCE INDUSTRIES LTD.

BACKGROUND.
 Incorporated on 8th may 1973 as
Mnylon ltd.
 Name changed to Reliance textiles
on 11th march 1977
 Now the company is known with the
name of Reliance industries ltd.
OBJECTIVES.

 Tocarry on business of
manufacturers, dealers, agents,
importers and financiers of all kind of
man made fibers and petrochemical
products.
Business units.
 Refining
 Chemicals
 Textiles
 Retail
Highlights.
 India’s first company to earn cash
profit of 25000 cr. And net profit of
15000 cr.
 Divident payout increased to 130%
amounting to 1831 cr Rs.
 KGD6-largest deep water project in
the world.
 RIL took over the operations of
GAPCO in 2007-08
Financial highlights.
 Turnover- Rs. 139269 cr.
 Market capitalisation-131589
(sensex)
 263075(nifty)
 Weightage- 17.42% (sensex)
 12.88% (nifty)
 13.4% of india’s total export.
 4.9% of GOI’s indirect tax revenue.
Capital expenditure
 Oiland gas (E & P) -13443 cr.
 Refining and marketing – 2661 cr.
 Petrochemicals – 506 cr.
 Balance sheet analysis.
 69% of long term capital is raised
through owner’s capital and 31%
through debt . Resulting high cost of
capital.

 Out of total shareholder’s fund 75%

of funds are invested in fixed assets
 Cont..
 Thepercentage of fixed assets and
current assets comes to be 75% and
25% respectively. Appropriate ratio is
of 80% and 20%.

 The current assets are 3728.24 cr

more than the current liability shows
that the company is in position to
fulfill its current liabilities.
 Cont..
 Working capital of the company is
only 3% of the long term company’s
capital showing the capacities of
fixed assets is not beng fully utilised.
Ratio analysis
 Cash position ratio:
 absolute cash ratio – 0.20 i.e 20% of
current liability.

 Short term solvency ratio:

 Current ratio – 1:1

 Cont..
 Workingcapital ratio – 0.05 i.e only
5% of net assets employed in
business.

 Profitability ratio
 Gross profit ratio – 19% of sales
 ROCE – 20.3%
 Cont..
 Long term solvency ratio:

 Debt equity ratio – 0.35

 Capital gearing ratio – 22.3.
 Recent issue in reliance
RIL-RPL MERGER
 RPL is a subsidiary of reliance
industries which was incorporated on
24th october 2005
 It carries on the business of refiners,
stores, suppliers and distributors of
petroleum and petroleum products.
 Benefits of merger
 Greater integration and financial
strength.
 Efficient cash management .
 Diversified human capital.
 Amalgamation will strengthen the
leadership in industry.
 Exchange ratio/swap ratio

 Swap ratio of 1:16 has been

recommended by the joint valuers of
both the companies.

 Chevron India holdings ltd having its

4% investment in RPL have agreed to
sell its shares which will be then
purchased by RIL till the effective
date of merger.