Shares of Reliance Industries (RIL) gained nearly 1% in opening trade on Monday after the oil-to-telecom conglomerate, through its subsidiary, signed an agreement to acquire polyester business of Shubhalakshmi Polyesters & Shubhlaxmi Polytex for ₹1,592 crore. The transaction includes a cash consideration of ₹1,522 crore and ₹70 crore, respectively, in a slump sale on a going concern basis.
Boosted by acquisition news, RIL share price opened a tad higher at ₹2,573.70, against Friday’s closing price of ₹2,568.60 on the Bombay Stock Exchange (BSE). Post opening, the stock climbed 0.9% to ₹2,591.10, with 0.19 lakh shares worth ₹4.99 crore changing hands over the counter on the BSE in the first hour of trade so far. In comparison, the BSE Sensex was trading 370 points higher at 60,165 levels, tracking strong cues from global peers.
Reliance, the country’s most valued firm, shares have given 9% returns to its shareholders in the past one year and 7% in the last six months. In the past one month, the index heavyweight has fallen nearly 2% as compared to 1.2% growth in the BSE Sensex.
The share price of billionaire Mukesh Ambani-led company currently trades 9% lower than its 52-week high of ₹2,855 touched on April 29, 2022. It hit a 52-week low of ₹2,181 on March 8, 2022. The market capitalisation stood at ₹17.5 lakh crore.
RIL in an exchange filing on Friday said that its subsidiary, Reliance Petroleum Retail executed definitive agreements to buy the polyester business of Shubhalakshmi Polyesters Ltd (SPL) and Shubhlaxmi Polytex Ltd (SPTex). The acquisitions are subject to approval of the Competition Commission of India (CCI) and the respective lenders of SPL and SPTex.
“The acquisitions are part of the company’s strategy to expand its downstream polyester business,” RIL said in the exchange filing.
As per the release, SPL has a continuous polymerisation capacity of around 2,52,000 metric tonne per annum and manufactures polyester fibre, yarns and textile grade chips through direct polymerisation route as well as extruder spinning with value addition through texturising. It has two manufacturing facilities situated at Dahej (Gujarat) and Silvassa (Dadra and Nagar Haveli). SPTex has a texturised yarn manufacturing facility at Dahej.
In RIL's 45th Annual General Meeting (AGM) last month, Mukesh Ambani unveiled plans to invest ₹75,000 crore in its petrochemicals and textile business over the next five years to expand capacities in existing and new value chains. Reliance Industries Limited (RIL), India’s largest producer of polyester fibre and yarn, aims to expand the value chain of Polyester and Vinyl as well as develop new products for the textile industry.
“In the Polyester value chain, we will build one of the world's largest single-train Purified Terephthalic Acid (PTA) plant of 3 million metric tonnes per annum (MMTPA) capacity at Dahej. We will also invest in a 1 MMTPAPET plant at Dahej. Both PTA and Polyethylene terephthalate (PET) will be targeted for completion by 2026. We will also reinvest in Polyester Filament Yarn (PFY) and Polyester Staple Fibre (PSF). Polyester expansion with a capacity of over 1 MMTPA will be completed in phases by 2026,” Ambani had said at the company's AGM.
Reliance is the world's largest integrated manufacturer of Polyester fibres and yarns under the Recron brand name, with a capacity of 2.5 million tonnes per annum. Recron Partially Oriented Yarn (POY) products are produced using multiple leading process technologies like Barmag, Dupont, Toray, Inventa, Zimmer, etc. to suit various customer requirements.