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Restructuring of gasification assets to unlock value for RIL

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Reliance-Industries-Limited

The restructuring of gasification assets will unlock value, provide flexibility for Reliance Industries Limited (RIL).

Gasification Undertaking is proposed to be transferred, as a going concern on Slump Sale basis, by way of a Scheme of Arrangement.

The Appointed Date for the Scheme is March 31, 2022 or such other date as may be approved by the Board. The Scheme has been filed with both Mumbai and Ahmedabad NCLTs and will require approvals of Shareholders, Creditors and NCLT.

RIL said this in a presentation for Equity Shareholders and Creditors in relation to the Scheme of Arrangement between Reliance Industries Limited (RIL) & its shareholders and creditors and Reliance Syngas Limited (wholly owned subsidiary of RIL) & its shareholders and creditors.

Gasification assets are proposed to be transferred to a subsidiary which will provide flexibility to induct suitable strategic partners and distinct sets of investors, RIL said in a presentation.

Collaborative and asset-light approach to unlock value of syngas, specifically induction of investors in gasifier subsidiary and capturing value of upgradation in RIL through partnerships and investments in different chemical streams.

With downstream optionality for Syngas, the nature of risk and returns associated with the gasifier assets will likely become distinct from those of other businesses of the Company.

Syngas has potential to produce H2 at a competitive cost of $1.2-1.5 / kg 2. With CCUS, RIL can be one of the largest producers of blue hydrogen globally.

In the interim, till cost of green hydrogen comes down, RIL can be the first mover to establish a hydrogen ecosystem, with minimal incremental investment, in India.

Subsequently, as hydrogen from syngas is replaced by green hydrogen, the entire syngas will be converted to chemicals.

Jamnagar energy demand is currently met through fossil fuels including syngas from the gasifiers. Fossil fuel can be replaced by renewables, including solar, biomass-based fuel, H2 and changing steam drives to electric drives. Jamnagar will progressively transition to renewables with battery energy storage system (BESS) to meet its electricity and steam demand. Hydrogen demand will be met by green hydrogen produced through water electrolysis.

RIL has set an ambitious target to achieve Net Carbon Zero by 2035. Framework for reducing carbon footprint include migration from fossil energy to renewables, maximizing sustainable materials and chemicals as part of portfolio, carbon fixation, capture and utilisation.

RIL said transition to Net Carbon Zero provides unique opportunity to unlock value through repurposing of assets and upgradation of configuration.

New chemicals subsidiary of RIL to focus on value addition to syngas. JV approach to attract technology/licensor partners for individual chemical streams and a balance-sheet light approach to de-risk investments.

Business

Mumbai ED attaches properties worth Rs 53 crore in bank fraud

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The ED attached immovable and movable properties worth Rs 53.95 crore in a bank fraud by a private company that resulted in a loss of over Rs 2,200 crore to a consortium of banks led by Indian Overseas Bank and 16 other banks, an official said on Monday.

The Directorate of Enforcement (ED), Mumbai Zone-I, provisionally attached the assets of Parekh Aluminex Limited (PAL) under the provisions of the Prevention of Money Laundering Act. (MLA), 2002.

Till date, the ED has attached total assets of Rs 546 crore in this case, the statement said.

The ED investigation was initiated on the basis of an FIR registered by CBI, EOW Mumbai and EOB Mumbai against Parekh Aluminex Limited, and others for offences under Sections 420 and 120-BIPC, 1860 and Sections 13(1)d) and 13(2) of the Prevention of Corruption Act, 1988.

Investigation has revealed that PAL fraudulently obtained loan from a consortium of banks by submitting inflated stock and debtor statements and later loan accounts of PAL were declared NPA for an amount of Rs 2,296 crore, the ED said.

The ED’s Investigation revealed that JK Shah Group assisted in the diversion of the Proceeds of Crime amounting to Rs 110.54 crore through various entities and persons.

One of the beneficiaries of the Proceeds of Crime received and enjoyed Rs 70.25 crore, forming part of the total Proceeds of Crime of Rs 2,296.58 crore, the ED said.

The ED had already attached assets worth Rs 493 crore in this case. A prosecution complaint (charge sheet) has also been filed before the Special Court (PMLA), Mumbai, which has taken cognisance of the offence, said the statement.

The conspirators inflicted a wrongful loss on a consortium of banks led by Indian Overseas Bank and 16 other banks, and the ED is examining the incriminating documents recovered during search operations to identify other players in the bank fraud, said the statement.

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Delhi traders say INDIA Bloc rally affected business

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The Delhi Vyapar Mahasangh has expressed concern over the impact of the INDIA Bloc’s rally held at Ramlila Maidan on November 1, saying the political event affected business activities, customers’ movement and the livelihoods of traders and workers in the national Capital, particularly ahead of the festive season.

In a statement titled, ‘What Did We Lose, What Did We Gain?’, the traders’ body said that while the rally may have provided political parties with an opportunity to express their views and demonstrate their strength, it left Delhi’s business community with several economic questions and concerns.

“November 1 may have been an opportunity for political parties to put forward their views and demonstrate their strength, but for Delhi’s business community, the day left behind several economic questions and concerns,” the Mahasangh said.

It pointed out that Delhi’s wholesale markets are not merely centres of local trade but also serve as an important foundation for the purchases, supply chains and livelihoods of millions of small traders across the country.

The organisation said that disruption to market activities, customer movement and the supply of goods just ahead of a major festive occasion like Diwali was a matter of concern.

Listing the losses suffered by the trading community, it said business activities and customer footfall were affected on Sunday.

Small traders arriving from other states also lost valuable time and purchasing opportunities.

It added that the daily earnings of shopkeepers, employees, labourers, transporters and families dependent on them were adversely affected.

The traders’ body further claimed that the normal commercial activities and business image of Delhi’s major markets had suffered a setback, while concerns had increased over the possibility of customers shifting towards online shopping and other commercial centres.

However, the Mahasangh also acknowledged certain positive aspects of the rally, saying it brought the problems and concerns of Delhi’s trading community onto a wider public platform.

It said the event once again highlighted the important role played by Delhi’s wholesale markets in the country’s economy and supply chain. It also underlined the need for better coordination between business interests, public convenience and traffic management while planning major events in the future.

“Delhi Vyapar Mahasangh (Regd.) respects democratic rights and peaceful protests. Every political party has the right to express its views, but equal responsibility towards trade, employment, ordinary citizens and the country’s economic activities is equally necessary,” the statement said.

“Political events last for a limited period, but the economic losses suffered by businesses and the impact on customers’ trust can be felt for a long time,” it added.

The organisation urged authorities and political parties to give priority to Delhi’s business calendar, festive season, market accessibility, supply of goods and public convenience while deciding the dates and venues of large-scale events.

“Politics has its place, and trade and employment have theirs. A balance between the two is the hallmark of a strong, responsible and healthy democratic system,” it said.

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Indian equity markets open up to 1 pc higher despite mixed global cues

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Indian equity benchmarks opened strong on Monday, surging about 1 per cent each despite mixed global cues amid buying in energy, auto and information technology (IT) sector stocks.

At open, Sensex was up 718.71 points or 0.97 per cent at 75,178.24, while Nifty was up 169.20 points or 0.73 per cent at 23,222.30.

Sectorally, energy sector shares led gain as Nifty Oil & Gas surged more than 2 per cent.

Meanwhile, Nifty Auto rose 0.77 per cent and Nifty IT gained 0.51 per cent.

On the losing side, Nifty Realty declined 0.74 per cent and Nifty Media was down 0.06 per cent.

There are clear indications of a turnaround in the Indian market assisted by positive external and domestic cues, market experts said.

“Externally, the slight cooling of Brent crude prices from last week’s high of $118 to $110 now is a relief. Equally important is the decline in the US 10-year bond yield to 4.93 per cent,” they said.

“Perhaps more important than these external tailwinds is the sharp weakening of the AI trade, which pulled down the Nasdaq by 2.8 per cent last Friday. The weakening trend in AI trade is beneficial for India which is widely regarded as a counter-AI play,” the experts added.

Fundamental domestic cues are also supportive, according to them. The 17.94 per cent credit growth and robust GST collections in October reflect a resilient economy gathering momentum.

“Another strong positive which can drive the market up is the rising expectations surrounding a thorough rejig of the LTCG tax in the coming Budget, most likely its abolition. The market, it appears, has started discounting this. In brief, for now, it is an advantage for bulls,” according to analysts.

For Nifty, RSI improved to 53.50, above its average of 45.97, while PCR at 1.24 indicated a positive derivatives setup. Immediate support is placed at 22,900-23,000, while resistance is seen at 23,200-23,250. A sustained move above the 50-day EMA would further strengthen the recovery.

Asian shares traded lower while crude oil witnessed weakness. International benchmark Brent crude declined 3 per cent to $109.97 per barrel, while US West Texas Intermediate (WTI) slipped about 3 per cent to $100.81.

In the US, Wall Street ended in negative territory on Friday, with Nasdaq posting its steepest one-day fall since June 5 as disappointing Intel and Amazon results intensified concerns over heavy AI spending.

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