Sanford C Bernstein report highlighted that Mukesh Ambani’s Reliance has the balance sheet but it is falling short on technology and knowledge when it comes to green energy.
Mukesh Ambani’s Reliance Industries Ltd (RIL) may earn USD 10-15 billion by 2030 from its new energy business, according to a report by US-based securities firm Sanford C Bernstein. The report, however, added that Mukesh Ambani, India’s richest person, will have to collaborate with other companies to overcome the challenges related to technology.
"By 2030, we estimate RIL could capture 60 per cent, 30 percent and 20 per cent of solar, battery and hydrogen target market respectively. RIL plans to have 100GW of installed solar capacity by 2030 which is 35 per cent of India's targeted capacity of 280 GW but represents 50 per cent incremental share," said the US-based securities firm.
The report mentioned that Reliance is planning to use its own cash flow to fund capex and keep net debt to Ebitda (earning before interest, tax, depreciation and amortisation) at under 1 times (0.6x in FY23).
"Based on our assumptions, we estimate RIL can achieve around $10-15 billion of revenue from New Energy business in 2030 which represents roughly 40 per cent of the market. Our assumptions for the New Energy business target market are aligned with current domestic energy policies and our expectation of India's EV adoption in India,” said Bernstein.
The report highlighted that Mukesh Ambani’s Reliance has the balance sheet but it is falling short on technology and knowledge when it comes to green energy. "While it is easy to dismiss their ability to pull it off, Reliance has shown they can move into new verticals successfully. We think the same is true here. Reliance however cannot afford to spend a year in R&D and instead have to make strategic investments in key companies which will enable them to start building capacity in India," it said.
Mukesh Ambani’s eldest son Akash Ambani is currently the chairman of Reliance Jio, while his daughter Isha Ambani is overseeing Reliance’s retail operations.
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 "Mukesh Ambani plans next move after success of Akash Ambani's Jio, Isha Ambani's Reliance Retail, can earn USD 15 billion")
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