The Telegraph
Since 1st March, 1999
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Slowdown may hit Reliance

Mumbai, Oct. 9 (PTI): An economic slowdown in India can impact demand-supply dynamics and profitability of all industry players, including that of the Rs 60,000-crore Reliance Industries Ltd (RIL) as 80 per cent of its revenues come from the domestic markets.

“These factors potentially expose Reliance to any risk of significant shock to the Indian economy, which may adversely impact the long-term economic fundamentals”, according to RIL’s first consolidated annual report after merger of Reliance Petroleum with the company.

It said the domestic, regional and global macro-economic environment directly influences consumption of petrochemicals and petroleum products and any economic slowdown can adversely impact demand-supply dynamics and profitability of all industry players, including Reliance.

In the risks and concern section of the annual report, Reliance has stated that unfavourable trends in import tariffs on key raw materials and products may adversely impact the cost structure and/or the selling prices of products in domestic markets, thereby potentially affecting margins.

Moreover, as part of overall risk management strategies, Reliance has insured its assets and operations against wide range of risks. “Any adverse movement in the value of domestic currency may increase the company’s liability on account of its foreign currency denominated external commercial borrowings in rupee terms,” the report stated.

Reliance is also planning to make significant investments in the exploration and production business, retail marketing of petroleum products and infocom business.

“Delays in the implementation of these projects, any adverse regulatory, judicial or legislative developments in these areas...could adversely impact the returns on Reliance’s investments therein,” the report added.

RIL is planning to set up india's largest internet protocol backbone connecting 115 cities with over 60,000 km of fibre on a terabit capacity.

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