1. RIL – RPL Merger
Presentation
Maryam Alwajih 10020241031
Subin Sajan 10020241053
Manish Sonowal 10020241118
Vijaya Manga 10020241026
Rani Palatty 10020241076

2. Reliance Industries
Scenario before merger-India’s largest
private sector enterprise with strong
financials:
– Revenue exceeds $ 33 billion*
– Exports of about $ 21 billion*
– EBITDA of over $ 5 billion*
Significant global player in Refining and
Petrochemicals - contribute 98% to
revenues
RIL at an inflection point
– Production of gas and oil from KG D6
to double India’s gas availability
– Investment in a world-class, complex
refinery asset
India’s most valuable company

3. Robust Growth Since IPO

4. RIL Refining – Mantras for Success
 In 1999, RIL commissioned a large, world
class, complex refinery in record time at
competitive capital cost
 Created industry benchmarks across various
operating parameters
 Product slate designed to cater to fast growing
transportation fuels
 segment and stringent product
specifications, across regions
 Processed over 80 heavy/sour crude variants
from across the world
 Consistently demonstrated higher GRMs
compared to global benchmarks

5. RIL: Unparalleled Refining Efficiency

6. RIL’s Refining Performance
High quality of refining asset and operations resulting in consistent and
superior performance across business cycles

7. Particulars Units Q4 FY10 Q1 FY11 Q2FY11 Q3 FY11 Q4FY11
RIL's reported
GRM $/bbl 7.5 7.3 7.9 9 9.2
Singapores
complex' $/bbl 4.9 3.7 4.2 5.5 7.4
Premium over
Singapore
GRM $/bbl 2.6 3.6 3.7 3.5 1.8
Crude
Throughput MMT 16.7 16.9 16.9 16.1 16.7

8. RIL's reported GRM $/bbl Singapores complex' $/bbl
Premium over Singapore GRM $/bbl Crude Throughput MMT
16.7 16.9 16.9 16.7
16.1
9 9.2
7.9
7.5 7.3 7.4
5.5
4.9
4.2
3.7 3.6 3.7 3.5
2.6
1.8
Q4 FY10 Q1 FY11 Q2FY11 Q3 FY11 Q4FY11

9. TOP 6 REFINERY wrt BPD
Name of Refinery Barrels per Day
Jamnagar Refinery (Reliance Industries limited) 13,00,000
Paraguana Refinery Complex (PDVSA) 9,40,000
Baytown Refinery (ExxonMobil) 5,72,500
Baton Rouge Refinery (ExxonMobil) 5,03,000
Hovensa LLC (PDVSA) (Hess Corporation) 5,00,000
Abadan Refinery 4,50,000

10. Barrels per Day
1,300,000
940,000
572,500
503,000 500,000
450,000
Jamnagar Paraguana Baytown Baton Rouge Hovensa LLC Abadan
Refinery Refinery Refinery Refinery (PDVSA) (Hess Refinery
(Reliance Complex (ExxonMobil) (ExxonMobil) Corporation)
Industries (PDVSA)
limited)

11. RPL
 Crude processing capacity of 580,000
barrels/day, completed in a record time of 36 months
 Higher complexity: Nelson Complexity Index of 14.0
– Among the top 5% refineries globally with capability
to process ultraheavy crude (Average API of 24)
– Built to supply ultra-clean fuels to meet the world’s
evolving needs
– Focus on high growth transportation fuel segment
 Lowest US$/complexity-barrel cost among recently
built refinery projects
 Crude refining commenced on 25th Dec ‘08 and first
parcel of product exported in Jan ‘09

12. Merger Highlights

13. Merger Details
 Appointed date of 1st April 2008
 Merger ratio of 1 share of RIL for every 16 shares
of RPL
 RPL shares held by RIL were cancelled. No fresh
treasury stock created
 RIL issued 6.92 crore shares to RPL shareholders
 4.4% increase in equity base from Rs 1,574 crore
shares to Rs 1,643 crore
 Promoter holding in RIL reduced from 49% to
47%

14. Merger Rationale
 Unlock synergies from combined operations
– Crude sourcing, Product placement, Supply Chain
Optimization
 Greater flexibility in operations planning Expansion of
refined product range
 Optimized utilization of secondary process units and
infrastructure
 Efficient utilization of combined cash flows
 Integrated energy companies consistently get higher
valuations vis-à-vis pure refiners; Mitigate Holding
Company discount
 EPS accretive

15. Amalgamated Entity
 RPL transforms into a diversified business with
less cyclicality
 RIL shareholders benefit from participating in
state of the art refinery without execution risk
 Mitigate holding company discount
 Integrated company valuation versus standalone
refinery

16. Integrated vs Standalone refineries
On a longer-term, sustainable basis, markets ascribe superior valuations to integrate
energy companies vis-a-vis standalone refiners

17. RIL vs RPL
RIL’s superior performance relative to RPL demonstrates its evolution
as a
world-class integrated energy company

18. Current Valuations
Current valuation reflects premium for integrated players across all
parameters

19. Post Merger Highlights

20. Advisors
 Valuation Advisors
– Ernst & Young Pvt. Ltd. And
– Morgan Stanley India Co. Pvt. Ltd.
 Transaction Advisors
– J.M. Financial Services Pvt. Ltd. and
– Kotak Mahindra Capital Co Ltd.
 Fairness Opinion
– DSP Merrill Lynch Ltd. (for RIL) and
– Citigroup Global Markets India Pvt. Ltd (for RPL)
 Legal Advisor
– Amarchand & Mangaldas & Suresh A. Shroff & Co.
 Tax Advisor
– PriceWaterhouse and Coopers Pvt. Ltd.

21. RIL Shareholding
Merger results in the creation of the world’s largest shareholder family of
around 3.7 million shareholders; Promoters diluted by 2%.

22. Impact of Merger Proposal
 RIL among top 10 private sector refining
companies globally
 Owned 2 of the world’s 3 largest, most complex
modern refineries
 World’s largest producer of ultra-clean fuels at a
single location
 Among 50 most profitable companies globally
 Among five largest producers of Polypropylene

23. World’s Largest Refining Companies
RIL to be amongst Top 10 non-state owned refining companies globally
RIL has doubled its refining capacity with focus on scale and complexity

24. Top 5 Complex Refineries Globally

25. Global Polypropylene Rankings
Merger takes RIL in to a Top 5 PP producer globally

26.  Non Dependency on outside fund a great
positive
 Crude prices movement- Key to margins
 Discovery of Oil and Gas fields in KG D6

27.  The RIL wrt PE Ratio, EV/EBITDA, PBV is
overvalued in the FY 09’,10’,11’ when compare
with the Global Refining averages.
 Though RPL entered late into KG-D6, after merge
the growth rate was increased.
 Jamnagar petroleum complex is the largest
refinery with 13,00,000 BPD
 GRM in FY 2011-USD $ 9.2 per barrel

28. THANK YOU