Professional Documents
Culture Documents
Analyst Presentation
2 March 2009
Business Highlights
2
Reliance Industries
India’s largest private sector enterprise with
strong financials: Global Ranks (Fortune Global 500 )
CAGR % CAGR %
FY 1977 FY 2002-03 FY 2007-08
(in US$ Million) 31 Years 5 Years
Net Profit increase greater than 20% per annum in any 5-year period since IPO
4
RIL Refining – Mantras for Success
RIL has an enviable track record in its decade long refining operations
5
RIL: Unparalleled Refining Efficiency
99%
88%
86% 86%
6
RIL’s Refining Performance
10 6
8
6 4
4
2
2
0 0
Q1 FY03
Q3 FY03
Q1 FY04
Q3 FY04
Q1 FY05
Q3 FY05
Q1 FY06
Q3 FY06
Q1 FY07
Q3 FY07
Q1 FY08
Q3 FY08
Q1 FY09
Q3 FY09
Cracking margins Source: Reuters / Company Data
Crude refining commenced on 25th Dec ‘08 and first parcel of product
exported in Jan ‘09
World class refinery with minimal project risk; ready to deliver superior returns
8
Merger Highlights
9
Merger Rationale
EPS accretive
10
Merger Rationale
Diversified
Diversified businesses
businesses State
State of
of the
the art
art Refinery
Refinery
Oil
Oil &
& gas,
gas, refining
refining and
and
Superior
Superior product
product slate
slate
marketing,
marketing, with
with higher
higher margins
margins
petrochemicals,
petrochemicals,
organized Operating
Operating in
in cyclical
cyclical
organized retail
retail and
and industry
industry
developmental
developmental of of SEZ
SEZ
Wider
Wider avenues
avenues for for fund
fund
deployment
deployment
Amalgamated
Amalgamated Entity
Entity
RPL
RPL transforms
transforms into
into aa diversified
diversified business
business with
with less
less cyclicality
cyclicality
RIL
RIL shareholders
shareholders benefit
benefit from
from participating
participating in
in state
state of
of the
the art
art
refinery without execution risk
refinery without execution risk
Mitigate
Mitigate holding
holding company
company discount
discount
Integrated
Integrated company
company valuation
valuation versus
versus standalone
standalone refinery
refinery
11
Integrated vs Standalone - Historical
PE Ratio EV / EBIDTA
30
10-Yr Avg. Premium of 26% 16 10-Yr Avg. Premium of 26%
5-Yr Avg. Premium of 18% 14 5-Yr Avg. Premium of 16%
12
20
10
6
10
4
- -
97
98
99
00
01
02
03
04
05
06
07
08
19
19
19
20
20
20
20
20
20
20
20
20
97
98
99
00
01
02
03
04
05
06
07
08
19
19
19
20
20
20
20
20
20
20
20
20
07
08
07
08
09
06
07
08
6
8
-0
-0
-0
v-
v-
v-
b-
b-
b-
g-
g-
g-
ay
ay
ay
No
No
No
Fe
Fe
Fe
Au
Au
Au
M
M
Source: Bloomberg
RIL and RPL have outperformed the Sensex since RPL IPO
RIL’s superior performance relative to RPL demonstrates its evolution as a
world-class integrated energy company
13
Current Valuations
PER (x) EV/EBIDTA (x) PBV (x)
CY09 / CY10 / CY09 / CY10 / CY09 / CY10 /
FY09 FY11 FY09 FY11 FY09 FY11
stock created
Rs 1,643 crore
15
Advisors
Valuation Advisors
– Ernst & Young Pvt. Ltd. And
– Morgan Stanley India Co. Pvt. Ltd.
Transaction Advisors
– J.M. Financial Services Pvt. Ltd. and
– Kotak Mahindra Capital Co Ltd.
Fairness Opinion
– DSP Merrill Lynch Ltd. (for RIL) and
– Citigroup Global Markets India Pvt. Ltd (for RPL)
Legal Advisor
– Amarchand & Mangaldas & Suresh A. Shroff & Co.
Tax Advisor
– PriceWaterhouse and Coopers Pvt. Ltd.
16
RIL Shareholding
location
19
World’s Largest Refining Companies
6.0
5.6 (In Mn BPD)
5.0
4.6
4.0 3.8
3.3
0.0
l
BP
l
L
s
ro
as
t
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il
ta
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ili p
pe
ro
no
ra
le
Sh
To
Br
leu
sn
m
ev
on
lI
nM
no
Va
tro
ica
Ph
tr o
ra
Ro
t ro
na
Ch
pp
Si
Pe
xo
iA
ex
Pe
o
tio
Pe
Ni
cc
Ex
sM
ud
Na
no
Sa
leo
in
Co
Ch
tr o
Pe
CDU
Nelson
Company Location Capacity
Complexity I ndex
(KBPS D)
Source: IEA
22
Creating the Refining Hub of the World
Capacity in Mn BPD Nelson Complexity
RIL, India 1.24 12.6
Paraguana, Venezuela 0.94 7.1
SK Corp, S. Korea 0.82
4.6
LG -Caltex, S. Korea 0.68 4.9
XOM, Singapore 0.61 8.8
XOM, Baytown, USA 0.57 12.6
Saudi Aramco 0.55 3.0
Formosa, Taiwan 0.52 6.2
S-Oil Corp, S. Korea 0.52 6.9
XOM, Baton Rouge 0.50 12.3
- 0.20 0.40 0.60 0.80 1.00 1.20 1.40
RIL will have the largest and the most complex refining capacity at
single location in the world
23
Global Polypropylene Rankings
Rail loading
Dedicated De-sal /
Captive 1000 MW Power
DM Plant
Gas / LPG
Pipeline
25
Summary
26
Thank You