InvestorQ : Is the plan to sell a stake in the O2C business to Saudi Aramco still on or has Reliance shelved the idea?
Debbie Mascarenhas made post

Is the plan to sell a stake in the O2C business to Saudi Aramco still on or has Reliance shelved the idea?

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Arti Chavan answered.
2 months ago
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There has been no discussion about the Saudi Aramco deal but remember there are few companies in the world that can pay such top dollars and Aramco is one of them. Initially, O2C business was valued at $75 billion with Aramco to buy 20% of the O2C business for $15 billion. It did not materialize due to the pandemic and Aramco started demanding lower valuations for the O2C business, which RIL was not willing to concede.

Contrary to the belief that it would deter the net zero-debt plans of RIL, the company went ahead and successfully managed to monetize Jio Platforms as well as Reliance Retail Ventures Ltd. Aramco may still return as a possible buyer but Reliance has remained steadfast that it would not compromise on its valuations! Clearly, RIL appears to have learnt its lessons from O2C and is spreading its bets.

Reliance Industries some very important and critical lessons from the monetization of Jio Platforms in the previous year. Firstly, RIL learnt that it would be the ideal scenario to have a combination of strategic investors and PE investors to broaden and to enrich the base. RIL had previously got tied down to Saudi Aramco and that had limited their leeway. Also RIL learnt that they could monetize quality assets at a good price even in tough times.

The biggest lesson that RIL learnt from monetizing the digital business was that investors need a credible story that is attuned to future trends in the industry. That is likely to be one big idea of O2C being hived off with a focus on green energy. Clearly, this time around RIL wants to play a diversified game like it did for Jio and RRVL. O2C economics may change favourably for RIL if crude goes above $60/bbl.

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