Reliance Industries Ltd., controlled by Asia’s richest man Mr Mukesh Ambani, toppled ExxonMobil Corp. to become the world’s largest energy company after Saudi Aramco, as investors piled into the conglomerate lured by the Indian firm’s digital and retail forays.
On July 24, 2020, Reliance, which manages the biggest refinery complex, gained 4.3 per cent in Mumbai adding US$ 8 billion to take its market value to US$ 189 billion, while Exxon Mobil erased about US$ 1 billion. Reliance has witnessed a 43 per cent rise in its shares this year while Exxon’s shares have dropped 39 per cent as the refineries are struggling across the globe with a plunge in fuel demand. The world’s biggest energy company is Aramco with a market capitalization of US$ 1.76 trillion.
The contribution of energy business in the total revenue in the year ended March 31 was about 80 per cent, Chairman Mr Mukesh Ambani’s plan to expand the company’s digital and retail arms and has so far attracted US$ 20 billion into the Jio Platforms Ltd. unit. This has helped in adding US$ 22.3 billion to Ambani’s wealth this year, driving him to the fifth spot in the Bloomberg Billionaires Index.
The deals involve investments from Google to Facebook Inc. into digital platform in recent months. The 63-year-old tycoon has identified technology and retail as future growth areas in a pivot away from the energy businesses he inherited from his father who died in 2002.
The large scale global oil demand has seen a decline to some 30 million barrels a day, or a third of regular usage, in April and has caused trouble in energy markets, from which they’ve only recently started to recover. The big oil companies have suffered because of worst-in-a-generation oil prices combined with OPEC production cuts, leading to collapse of refining margins and millions of barrels of unsold crude.
