India: RELIANCE announces demerger of O2C business to become new subsidiary for OIL and GAS business

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RELIANCE has announced the demerger of the O2C business. A new subsidiary will be formed for the company's OIL and GAS businesses. Businesses such as petrochemical, gas, fuel retailing will be involved. The company said Demerger will help in finding new opportunities in the O2C business.

Reliance Industries has announced the demerger of its OIL 2 Chemical business. The company will create a new subsidiary for the O2C business. After this, the O2C business will include petrochemical, gas, fuel retailing. This demerger will help bring in investors like Saudi Aramco. Along with this, it will also help in finding new opportunities in the O2C business.

This demerger is expected to get all clearances by the second quarter of FY 2022. RIL will give loan to this new subsidiary for 10 years. The company will be given a loan of $ 25 billion to the new subsidiary. With the loan amount, the subsidiary will buy the O2C business. However, the loan for O2C business will remain with RIL.

Reliance Industries Limited (RIL) on Tuesday said that the company would create an independent and new subsidiary of its Oil-to-Chemicals (O2C) business, but at the same time the company said that 100 percent of this new subsidiary The company will have management control.

RIL has said in a notification to the exchanges that the promoter group will hold 49.14 per cent stake in the O2C business even after reorganization and the process will not result in any stake in the company.

RIL said that the company has already received consent from the Securities and Exchange Board of India (Sebi) for reorganization. However, the company is yet to get clearance from equity shareholders and creditors as well as National Company Law Tribunal (NCLT) benches and Income Tax authorities in Mumbai and Ahmedabad.

MORGAN STANLEY has given an overweight rating on RIL and has fixed the target at Rs 2252. He says the company will have 4 growth businesses by demerging. The company's digital, retail, new energy business will grow. At the same time, growth will be supported by the new material business. With this, the market is seeing value in digital and retail.