A load of crap from an idle brain

With signs of green shoots showing in economies worldwide, India  Inc’s appetite for overseas acquisitions got a fresh lease of life with Reliance Industries’ estimated $10-12 billion offer for a controlling interest in bankrupt LyondellBasell Industries.

The deal by India’s largest private sector company controlled by Mukesh Ambani, if closed, will make it one of the largest petrochemical outfits in the world. It will also be the second largest overseas acquisition by an Indian company, after Tata Steel bought Corus for $13 billion in 2007.

RIL has enough money power to make the deal happen. It has $4 billion in cash and $8 billion in treasury stocks, besides a favourable 0.35:1 debt-equity ratio. It also raised $660 million through treasury stocks sale recently.

In the year to October, Indian comanies acquired overseas assets worth $586 million, a sharp fall from the $13.06 billion in the same period a year ago, according to data from Grant Thornton Deal Tracker.

HSBC believes outbound activity will bounce back. About 70 per cent of HSBC’s pipeline is outbound transactions, which has remained the same as the previous year’s.

Tarun Kataria, managing director and head of corporate, investment banking and markets at HSBC, says India is sitting on the cusp of rapidly growing cross-border M&A activity.

“Indian firms are now well capitalised, are trading at circa 20x multiples, offshore markets are trading at a discount to India and financing is more readily available to Indian corporates than to competing offshore acquirers.”

Rest of the news here

Reliance Industries Ltd’s new refinery in western Gujarat state began processing crude this week, nearly doubling company output and creating the world’s biggest refining complex just as global demand retreats.

After reaching full capacity of 580,000 barrels per day (bpd), the $6 billion project, one of the most sophisticated in the world, will make the oil complex in Jamnagar the single-biggest supplier of fuels to the global market. It will pump out 1.24 million bpd of ultra-clean fuels to meet demand in Europe, Africa and the United States.

The refiner’s process configuration is being designed to maximise gasoline, alkylate, jet fuel and diesel output, as well as premium products such as 0.1 percent sulphur gasoline and diesel, while the production of residual fuel will be limited.

RPL refinery at a glance

• It is one of the world’s most complex refineries with a Nelson Complexity index of 14.0. This will enable the refinery to process heavy-crude varieties and produce superior quality products that meet stringent specifications, even beyond the forthcoming Euro IV norms.

• The high complexity will also present a significant competitive advantage in the current industry landscape of increasingly heavy and sour new crude discoveries. In addition, the widening light-heavy differentials in recent years will add to its competitiveness.

• RPL refinery is located adjacent to RIL’s existing refinery and petrochemicals complex, which is among the largest and most efficient complexes in the world. Through sharing of best practices and leveraging the existing infrastructure, RPL will stand to gain in the areas of operational efficiency, logistics, crude sourcing, product placement and risk management

• Close proximity to the Middle East. The result: lower ship turnaround time and reduced crude freight costs.

Above news source: Reuters UK & Indian Express

Pictures source: Reliance Petroleum website

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ONGC Ltd has decided to exit the proposed refinery-cum-petrochemicals project at Kakinada in Andhra Pradesh, making way for the GMR Group, which will hold 51% equity in the project that was originally to cost Rs 31,000 crore. The project is part of Andhra Pradesh’s Petroleum Chemical and Petrochemical Investment Region (PCPIR) proposed over 600 square miles and envisaged to attract investments worth Rs 340,000 crore over the next ten years. GMR’s entry is expected to put PCPIR on the fast-track now.

However, the refinery project is likely to cost close to Rs 40,000 crore with GMR indicating that it would like to increase the capacity upwards of 20 million tonnes to make it more viable, sources privy to the proceedings of a board meeting today told DNA Money.

It is understood that GMR has proposed a higher capacity upwards of 20 million tonnes of refining to make the export oriented project more viable. Reliance Industries had started its own refinery with a capacity of 30 million tonnes and was now going in for an expansion, it was pointed out at the board meeting held on Monday.

Full article here

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India’s two leading conglomerates, Tatas and Mukesh Ambani-led Reliance Group, have made it to the league of the world’s 25 most innovative companies, riding on the cheapest commercial car Nano and an aggressive growth path, respectively.

In the list of world’s 25 most innovative companies released here on Friday, Tata group is ranked at the sixth position, while Reliance Industries is at 19th spot. The list, published in the April 28 edition of BusinessWeek magazine that hit the newsstands on Friday, has been compiled by the US financial publication in collaboration with Boston Consulting Group.

Both Tata and RIL have made it for the first time to the annual list which is topped by Apple Computer, the maker of iPod music players and Mac personal computers. Apple is followed by Internet search giant Google, Japanese auto major Toyota, industrial conglomerate General Electric (GE) and software behemoth Microsoft in the top five.

About Tata group , BusinessWeek said that “Mumbai-based conglomerate jumps onto our list for the first time, fuelled by its paradigm-busting 2,500 dollar ‘Nano’ car for the masses”.

“The car, from its Tata Motors unit, is the world’s cheapest, thanks partly to a distribution model that sells the auto in kits to entrepreneurs who assemble them for buyers.”

About RIL, it noted that “the Indian petrochemicals giant made it onto our list this year thanks to fans of its aggressive growth. “But its ambitious plans to reach into grocery retailing, which is dominated in India by small shopkeepers who have rebelled against corporate entrants, have faltered,” it added.

Above news courtesy: TimesofIndia

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Reliance Industries Ltd (RIL) chairman Mukesh Ambani said on Sunday that G8 has become outdated. “The G-8 has become outdated. How can you keep two billion people (from India and China) out of a group and make decisions about the world,” said Mr Ambani at the India Economic Summit. He said that there is a great disparity in the oil consumption in the world. The per capita consumption of oil is five barrels globally, for the US it is 25 barrels and for India it is only 1 barrel and therefore there will be increase in demand for oil consumption in future, said Mr Ambani. He said that while developed nations grew when oil prices were cheaper, the developing countries will have to grow at a higher oil prices.

“I was at an oil conference and the thing that struck me was a comment by one of the participants that Americans can’t really complain about oil prices reaching $80 or $100 per barrel as they pay $1,100 a barrel for Star Bucks coffee,” he said. “Once it was said that there was only 1 trillion barrels of oil in the world but we have already consumed that and we are getting to another one trillion barrels though even that will be only for 20 to 30 years,” Mr Ambani said.

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