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<\/p>\nReliance Industries (RIL) has been distilling its investment strategy to meet new goals.<\/p>\n
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The share of the new energy vertical — its key focus area — accounts for more than a fourth (26 per cent) of the total war chest of $6.4 billion, ploughed into acquisitions and picking up stake from 2018 to date, reveals the latest Morgan Stanley data.<\/p>\n
Nearly half the incremental investments made on deals by RIL between August 2020 and September this year ($3.3 billion) has been spent on new energy — acquiring global companies with technology and expertise.<\/p>\n
By comparison, the telecommunications (telecom) and internet vertical accounts for less than a fourth of the incremental money spent in the past two years. In retail, it is a mere one-tenth.<\/p>\n
Retail has been a straggler for RIL.<\/p>\n
Its share in the total pie invested since 2018 remains stagnant, falling from 13 per cent in August 2020 to 11.78 per cent this September.<\/p>\n
The money put in for picking up stake is not even close to $1 billion, although this is a key vertical earmarked for future growth, along with new energy and telecom.<\/p>\n
The reason for this is simple.<\/p>\n
Its big deals either did not fructify or are stuck in legal wrangle.<\/p>\n
Sources say it recently led the race to buy Boots from Walgreens and had offered about $6 billion.<\/p>\n
But the owners decided not to sell.<\/p>\n
RIL’s agreement with Kishore Biyani to acquire Future Group for $3.3 billion is mired in legal morass with Amazon.<\/p>\n
Sources say RIL is one of the players looking to buy Metro Cash & Carry — the wholesale company now changing tack and delivering products directly to kirana shops.<\/p>\n
Analysts say this is an area to keep an eye out for some big-ticket deals.<\/p>\n
Had any of these two deals materialised, the retail vertical would have been ahead of others.<\/p>\n
RIL’s total war chest for picking up stake and acquisitions would have exceeded $10 billion.<\/p>\n
It is nonetheless close to the mark.<\/p>\n
However, the telecom and internet space is still at No. 1 in terms of its relative share to the total spent on various deals by RIL since 2018.<\/p>\n
It has shrunk to 39 per cent of the pie this September, from 56 per cent in August 2020.<\/p>\n
Some verticals are seeing more action, especially digital and material, chemical, and traditional energy.<\/p>\n
Investments in the digital space have gone up 180 per cent from January to $311 million in September this year.<\/p>\n
Investments in chemical, material, and traditional energy saw 56 per cent upturn in the same period.<\/p>\n
There are, of course, verticals in which, based on data from Morgan Stanley, RIL has clearly not made acquisitions or picked up stakes.<\/p>\n
The amount invested in media and education has remained at $688 million since August 2020.<\/p>\n
As a result, its percentage share of investments has halved to 11 per cent this September, from 22 per cent in August 2020.<\/p>\n