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Reliance Industries: Reiterates focus on high growth, scalable, new energy business
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What's Buzzing
With a quest for accelerated and scalable growth, Reliance Industries (RIL) in its AGM, has reiterated its focus on green energy business across the entire spectrum of activities (battery storage, green hydrogen, power electronics, solar panel manufacturing, fuel cell system).
Context:
In its last years AGM, RIL announced its mega foray into new energy business by focusing on four pillars (gigafactory); namely a) photovoltaic panels, b) energy storage, c) green hydrogen, d) fuel cell systems. In the recently concluded AGM, the company added the 5th pillar (giga factory) in the form of a foray into power electronics.
Our Perspective:
The company, from the last AGM to this, has already made tangible progress on many of the pillars mentioned above. For instance, it has entered into strategic partnerships in energy storage battery domain, which includes: (1) Lithium Works (lithium iron phosphate (LFP) solutions), (2) Faradion (sodium-ion battery chemistry) and (3) Ambri. On the photovoltaic side, the acquisition of REC Solar is doing well. Further, the company plans to increase the capacity from 1.2 GW to 1.8 GW coupled with upgradation of technology with clear focus on staying ahead on the product tech curve. The cell and module capacity at Jamnagar is likely to commence operations from 2024, which will be a first of its kind quartz to module facility. Partnering with Stiedsdal will help in accelerating cost reduction of the green hydrogen while the company is also scouting for partnership in the field of gigawatt electrolyser manufacturing. We believe RIL is on the right track to diversify away from its conventional oil & gas business by creating an entire manufacturing ecosystem backed by strong technological partnerships and acquisitions. The key distinguishing factor of the company, typical attributes of its any new venture, is the scale at which it is aspiring to capture the entire green energy value chain coupled with strong technological backbone, which will ensure value creation for all stakeholders.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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