Adia and Saudi Arabia's PIF invest $1bn in Ambani's Reliance Industries' fibre-optic unit

India's Reliance Industries posts 15% drop in second-quarter profit

Reliance Industries posted a 15 per cent drop in quarterly profit as the Covid-19 pandemic hurts oil demand but the company's diversification into retail and digital space pays off. Reuters.

Abu Dhabi Investment Authority and Saudi Arabia’s Public Investment Fund invested 75.6 billion Indian rupees ($1bn) in Reliance Industries’ Digital Fibre Infrastructure Trust.

The two state entities each paid 37.8bn rupees to buy units in the trust that oversees the Indian conglomerate's fibre optic assets, Reliance Industries said in an investor presentation on Friday.

The company underscored the "induction of strong partners for managing [a] critical asset base," according to the presentation.

Adia and the PIF have previously invested in Reliance Industries.

India’s most valuable company is expanding into retail and technology in a bid to tap into the country's consumer boom and move away from its core oil-refining business.

Adia said it plans to invest 55.12bn rupees in Reliance Retail Ventures, the country's largest retail chain.

PIF invested 113.67bn rupees in Reliance Industries' Jio Platforms in return for a 2.32 per cent stake.

Reliance Industries posted a 15 per cent drop in quarterly profit on Friday as the Covid-19 pandemic hurt its oil and gas business unit. However, revenue from its telecoms business softened the blow.

Net profit for the three months to the end of September fell to 95.7bn rupees from a year ago, the Mumbai company said in a bourse filing on Friday. Quarterly revenue fell by 24 per cent to 1.16 trillion rupees.

“We continue to pursue growth initiatives in each of our businesses with a focus on the India opportunity,” Reliance chairman Mukesh Ambani, 63, said.

Refining and petrochemicals revenue in the company’s core oil and gas exploration business fell by 36 per cent and 23 per cent, respectively.

“Domestic demand has sharply recovered across our O2C [oil-to-chemicals] business and is now near pre-Covid levels for most products,” Mr Ambani said.

Reliance Retail Ventures recorded a 4.9 per cent decline in quarterly profit.

“Retail business activity has normalised, with strong growth in key consumption baskets as lockdowns ease across the country,” Mr Ambani said.

Reliance’s Jio posted a net profit of 28.44bn rupees, compared with 9.9bn rupees in the same quarter a year ago. Its revenue rose by 33 per cent as the number of subscribers exceeded 400 million.

“With large capital raise in last six months across [the] Jio and Retail businesses, we have welcomed several strategic and financial investors into the Reliance family,” Mr Ambani said.