RIL May Use ‘Marketable Securities’ For Expansion: Mukesh

Mumbai: Hinting at acquisitions and overseas expansion, the Chairman of Reliance Industries, Mukesh Ambani, said that RIL could use “marketable securities” for its growth, valued at Rs 1,10,000 crore at current market prices.

“This, along with the conservative financial position, will give Reliance the ability to pursue both organic and inorganic growth of significant scale and size in the future,” he said, at the company’s AGM on Friday.

RIL earlier used to grow companies from scratch. This strategy “cannot entirely drive growth in an era of intensive global competitiveness, rapid technological change and limited windows of market opportunities,” said Ambani.

“Reliance is, therefore, actively pursuing an acquisition mode of growth,” he said, “Our recent acquisitions in Malaysia (in the polyester business) and Africa (in the downstream oil sector) are forerunners to the unfolding of an acquisition-led strategy.”

EGYPT, RUSSIA on radar

On the strength of its India play, Reliance will be extending its petrochemical participation to countries with feedstock advantage and high-growth markets, such as Egypt and Russia, he said.

The refinery expansion project at Jamnagar under Reliance Petroleum will be ready ahead of schedule, by end of next year. RIL will be investing $8-9 billion at its Jamnagar ‘Super Site’ over three to four years, where there will be two refineries as well as the world’s largest (six million tonnes) integrated combined cycle coke gasification complex, scheduled for a 2012 completion.

In exploration and production, the company has invested over $2 billion and is committed to spending $4 billion more of risk capital, said Ambani.

Reliance targets 10 billion barrels of oil.

“The pathway to this would be through world class partnerships,” he said. RIL’s current global reserve base is estimated at 4.4 billion barrels of oil equivalent.

(RIL’s Dubai subsidiary has been awarded overseas blocks in five different countries.)

The RIL scrip declined by Rs 62.80 on Friday to close at Rs 2,566.82 on BSE.