Reliance Power Limited is part of the Reliance Anil Dhirubhai Ambani Group. It was established to develop, construct and operate power projects in the Indian and international markets. Reliance Energy Limited, an Indian private sector power utility company and the Anil Dhirubhai Ambani Group promote Reliance Power.With its subsidiaries, it is developing 13 medium and large-sized power projects with a combined planned installed capacity of 33,480 MW.Reliance Natural Resources merged with Reliance Power in 2010, shortly after its initial public offering. In July 2014, Reliance Power acquired the entire 1,800 MW hydropower portfolio of Jaiprakash Associates for over 7px10,000 crore. Wikipedia.
News Article | December 1, 2016
Seemingly little connects a community in India plagued by toxic water, a looming air pollution crisis in South Africa and a new fracking boom that is pockmarking Australia. And yet there is a common thread: American taxpayer money. Through the US Export-Import Bank, Barack Obama’s administration has spent nearly $34bn supporting 70 fossil fuel projects around the world, work by Columbia Journalism School’s Energy and Environment Reporting Project and the Guardian has revealed. This unprecedented backing of oil, coal and gas projects is an unexpected footnote to Obama’s own climate change legacy. The president has called global warming “terrifying” and helped broker the world’s first proper agreement to tackle it, yet his administration has poured money into developments that will push the planet even closer to climate disaster. For people living next to US-funded mines and power stations the impacts are even more starkly immediate. Guardian and Columbia reporters have spent time at American-backed projects in India, South Africa and Australia to document the sickness, upheavals and environmental harm that come with huge dirty fuel developments. In India, we heard complaints about coal ash blowing into villages, contaminated water and respiratory and stomach problems, all linked to a project that has had more than $650m in backing from the Obama administration. In South Africa, another huge project is set to exacerbate existing air pollution problems, deforestation and water shortages. And in Australia, an enormous US-backed gas development is linked to a glut of fracking activity that has divided communities and brought a new wave of industrialization next to the cherished Great Barrier Reef. While Obama can claim the US is the world’s leader on climate change – at least until Donald Trump enters the White House – it is also clear that it has become a major funder of fossil fuels that are having a serious impact upon people’s lives. This is the unexpected story of how Obama’s legacy is playing out overseas. A hulking thermal power plant funded by American money shimmers in orange when night settles in India’s coal-rich district of Singrauli. A heavy blanket of smog wraps around the industrial district and its residents. Sasan, an ambitious project by Indian energy utility Reliance Power, consumes coal incessantly from a nearby mine in the promise of lighting the homes of almost 300 million people in the country. But since it began operating in 2012, the project has been caught in a storm of health and safety violations, environmental concerns and land disputes. In 2010, Sasan was handed a $650m export finance loan by the US Export-Import Bank (Ex-Im), a taxpayer-funded branch of the federal government that ostensibly exists to support American jobs and contribute to the US Treasury. The Sasan project was initially rejected by the bank for financing because of the extremely high carbon emissions from the coal-powered plant. However, Reliance reapplied for the loan under tighter emission guidelines, promising to “offset” 26.4m tonnes of annual carbon dioxide emissions produced by the plant through renewable power projects. Ex-Im Bank approved the loan to facilitate exports of goods and services from the US, insisting on environmental and safety guidelines for the plant’s sustainable development. However, over the course of five years, residents and activists in Singrauli concerns about the project have grown. Ramakali, 30, dressed in a vibrant sari with a thick smear of vermillion on her forehead, bent over a murky green well that was brimming to the top. The towers of Reliance Power stood tall behind her, the lettering on the chimneys within sight of her mud-and-brick home in the village of Harrahawa. Flies and insects flitted in the well water. “The water has started to taste funny,” she said. “I have been struggling with strong pains in my stomach ever since they started dumping their trash into our groundwater.” She pointed to the residual ash dumpsite of the Sasan plant, which is only a couple of metres from her doorstep. On a hot day, one can see ash dust blowing up from the ash pond in the direction of nearby villages surrounding the plant. The locals complain that ash from the enclosed reservoir is settling into the surface water of nearby regions, causing the wells to fill up to the top with impure water. “We put in a request for a handpump to the company but we never heard back,” Ramakali said, shaking her head. “They do nothing. We have complained countless number of times.” The national green tribunal, a court that hears environmental cases in India, released a report by a committee of environmental experts in August 2015, stating that the groundwater in Harrahawa next to the plant had high levels of mercury in it. Excess mercury in drinking water has been medically linked to severe nervous disorders and birth defects. Sasan was not exclusively identified as a source of contamination in the report, but the experts are certain that it’s linked to Sasan and the other big thermal plants in the region. Two other government agencies determined Sasan’s mining waste was illegally overflowing into surrounding forest and farmlands, and that the company had failed to restore the green space lost due to the plant’s construction. Toxic coal dust was also found to have settled in the fields located next to the mines. The Singrauli industrial cluster has been dotted with several giant thermal plants and coalmines since the 1980s, Sasan being the most recent addition to the country’s coal hub. In January 2010, the Indian ministry of environment and forests declared Singrauli a critically polluted area. “When Reliance was planning to set up a plant in Singrauli, they knew that area already had severe poisoning and massive industrial pollution issues,” said Ashwani Kumar Dubey, a lawyer who has repeatedly taken on the coal industry. “Yet, they went ahead and set up their plant. They are adding to the damage, and not doing anything to control it.” Reliance’s coalmine at Moher and its dumpsite are only a short distance away from the thermal power plant. The coal is transported into the power plant through a 14km long, blue, snake-like conveyor belt, saving Reliance Power the overhead costs of railroad transportation. Devnarayan Sahu, 40, lives with his family and a herd of cattle in a village cluster called Amlohri, within 50 metres of Sasan’s overflowing dumpsite. The thud of mine blasting echoes in the background and Narayan’s house quivers a little. “We’ve become used to the tremors,” he said. Narayan walked over to his backyard, and pointed to the bulldozers dropping boulders from atop the mounds of toxic mining waste. “Look at how those stones are rolling into my farm and home,” he said. “When it rained a couple of days ago, we were flooded with their rubble.” A layer of grey coal dust has settled on his impoverished eggplant and tomato farm, his main source of livelihood. “If I don’t water them continuously to get rid of the toxic dust, the crop will not flower,” he said, wiping off dust from a pod with his fingers. The industrial pollution is taking a toll on Narayan and his family. Difficulties in breathing, stomach aches and joint pains are common. “When we cough in the morning, we see dust in our sputum,” he said. “The little that we earn is now going into medical treatments.” “Asthma, allergies and bronchitis are prevalent here because of the air pollution, especially in children belonging to clusters around the ash dams, mines and thermal power plants,” said Dr Kalpana Ravi, a paediatrician at the local district hospital in Waidhan. Narayan has been pleading with Reliance to remedy the situation for years, but nothing has happened. “Many officials have come and inspected the place,” he said. “They come and go, but do nothing. Reliance says they don’t need our land as of yet. We can see the big boulders falling. Like many others who have abandoned their homes for the fear of their lives, they want us also to eventually get scared and move away on our own.” Families settled almost directly underneath the noisy conveyor belt that brings coal to the plant have a similar tale to tell. “I don’t know what will happen sooner: will we go deaf first due to the constant and unbearable rattling over our rooftops, or will we choke on the coal dust falling from the belt,” said Sukhlal Panika, who lives under a section of the conveyor belt with his aged mother. Reliance only acquired a part of his farmland for the belt, leaving his house and well exposed to the pollution caused by coal transportation. Sasan has also been hit by reports of accidents, harassment, fatalities and injuries. In February 2015, Ex-Im’s chairman, Fred Hochberg, criticized the “poor” safety practices at the Sasan project in a letter to Reliance. Hochberg stated: “the number of all fatalities at the integrated Project is now 19 – which is both tragic and absolutely unacceptable.” The chairman’s letter said “the alarming number of injuries and fatalities must come to an end” and that “rather than improving, the situation appears to be deteriorating”. The police confirmed that 16 cases relating to the Sasan plant and coalmine have been investigated since 2012, resulting from vehicle accidents, beam and tower deaths and electric shocks. Activist Awadhesh Kumar, who has been speaking to workers in Sasan and surrounding villages, believes the real number is larger. “It’s harder to account for the migrant workers who have no family here, and they form a huge chunk of Sasan’s labour population. When something happens or someone goes missing, there is no one to question the company for a report or explanation.” In response to Ex-Im’s letter regarding the incidents, Sasan provided the bank with information on a taskforce comprising middle managers for the purpose of improving safety and training. But the steps taken by Ex-Im to regulate Sasan are too little too late, according to people living around the thermal power plant and the coalmine. “Ex-Im’s ground inspection should have been done a long time back, and that too on a regular basis,” said Kumar. “A federal agency of the United States of America should hold their financed projects to better and more neutral standards. Development is good, but not at the cost of the environment and the people who give away their everything to make way for such projects.” All points in the story have been raised with Reliance officials. They are yet to comment. Alan and Ailsa Smith say setting foot on Curtis Island is like stepping back in history. The world-heritage-listed tropical island where they live sits just off the coast of Gladstone in Queensland, Australia, right under the Tropic of Capricorn. “It’s a quiet little community here. You slip back 25 years in time,” said Alan. The couple own a small grocery store and bed-and-breakfast. It’s the only business in the only village on the island, which is home to just 30 permanent residents. But South End has a new neighbour that makes itself known at night, illuminating the clouds with its startlingly bright lights, and occasionally sending flames into the sky. Since 2010, amid a storm of controversy that extended from Australia to the US, Curtis Island’s 30 residents have been joined by three giant gas liquefaction plants, with a fourth on the way. When complete, they will propel Australia to become the world’s biggest exporter of liquefied natural gas (LNG), overtaking Qatar. Their development has allowed a controversial fracking boom in Queensland, where about 6,000 coal seam gas wells have been drilled to deliver gas to be liquefied at the plants. Two of the three plants – APLNG and QCLNG – have been backed by a $4.7bn loan from the US Export-Import Bank. Once operational, these developments will produce about 11.3m tonnes of carbon dioxide each year – and this figure will be much higher if methane emissions that leak from the wells aren’t controlled. Those estimates ignore the carbon emissions that will be produced when the gas exported from Curtis Island is burned. The two US-funded plants will produce up to 17.5m tonnes of liquid natural gas each year. When burned, that will pump about 50m tonnes of CO into the atmosphere – roughly equivalent to the annual output of Sweden. Sitting and having a beer at Capricorn Lodge, another of the island’s residents, Michael Radcliffe, says he isn’t bothered by the LNG plants, but expressed some concern about smoke produced when the plants burn some of their gases in large flares. “There’s a lot of black stuff that comes out,” Radcliffe said. A week earlier there were a lot of flares that produced a lot of black smoke, he said. “I thought there was a bushfire or something going on.” From the top of Ship Hill, it’s clear why the locals are interested to see the plants at sundown. As the sun sets, thousands of lights on the gas plants light up. The bushland between the hill and the plants is thick, but through the trees the sight of the huge plants – and the contrast they make with the rest of the island – is astounding. The plants produce a loud hum, a bit like the sound of a giant refrigerator – which is almost exactly what an LNG plant is. To allow ships to dock to collect the liquified gas, the Queensland government conducted a huge dredging operation in the harbour. Around 25m cubic metres of earth have been scooped up from the harbour floor, with the Australian government giving approval for a further 19m cubic meters to be dug up. Some was simply dumped in the Coral Sea and the rest was put behind an 8km “bund wall” and used to reclaim land right opposite Curtis Island – a measure intended to stop the dredge spoil from smothering the delicate ecosystems of the Great Barrier Reef. The wall failed, the dredge spoil leaked through it, and spread through the Great Barrier Reef world heritage area. Satellite analysis showed the plumes of mud that spread through the water stretched for 35km into the Coral Sea, which would have degraded seagrass meadows that support endangered dugongs. As the dredging started, fishermen reported an outbreak of disease among marine life, which scientists said could have been caused by metals on the seafloor that were released into the water. In an unusually forthright step, the International Union for Conservation of Nature, which advises the UN’s world heritage committee on scientific matters, called for the LNG developments to be halted. Trevor Falzon used to catch fish in Gladstone Harbour, home to one of the largest ports in the world. He was the lead plaintiff in an unsuccessful case brought by 51 fishermen against the Gladstone Ports Corporation over the dredging. The development meant they lost an area that they used to fish in. And the dredging meant the nets they used in shallow water weren’t suitable in the new deep water, but the case was thrown out. “Now I have to sell everything – my house is on the market,” Falzon said, sitting among packing boxes in his house on the outskirts of Gladstone. As the sun dips across the rolling hills of South Africa’s eastern Mpumalanga province the lights come on high above the valley’s wetlands, soaring columns and cranes, black against the reddening sky. The vast structure on the ridge is clearly visible from the small settlement of Arbor, a huddle of shacks and huts on a narrow strip of land between a coalmine and railway sidings 10 kilometres from Kusile. “I watch it growing and I wonder what it will bring. It might mean jobs and development, or maybe sickness and drought. I don’t know. So I hope and pray it will make things better, not worse,” said Sibongile Sibeko, 41, a mother of five children in Arbor. The structure Sibeko can see is what has so far been built of Kusile, which will be among the 10 biggest coal-fired power stations in the world, and is already one of the most controversial. The project is part-funded by the US government, having received a loan of $805m from the US Export-Import Bank in 2011 after Eskom chose a US company to play a key engineering role, creating hundreds of jobs for American specialists. The money was crucial to the $8.4bn project, say campaigners. “Kusile would have been very challenging to proceed with if the money from the Export-Import Bank had not come through,” said Melita Steele of Greenpeace. Delayed by decades and wildly over budget, Kusile is emblematic of a development model increasingly seen as outdated. The days of vast mega-projects with enormous financial, social and environmental costs, as well as the potential to transform economies, are over, some experts say. Instead, smaller and cheaper projects can bring change as effectively, supplying energy and other needs with minimal impact. “The only hope for us is renewable energy. That would mean less destruction, less landgrabbing or none at all and no need for coal and water,” said Matthews Hlabane, of the South African Green Revolutionary Council, a local NGO. But the loan was also very expensive. As local currency has lost value against the dollar the cost of repayments has soared. The project is immense. When completed Kusile will consist of six units with the ability to generate 4,800MW, making it significantly bigger than any power station in the US except the hydroelectric Grand Coulee dam in Washington. Defenders say Kusile has been designed with advanced technology that will minimise its environmental impact, such as scrubbers to control sulphur dioxide and filters to reduce emissions of dangerous particulates. The plant will use an air cooling system to help conserve water and is designed so equipment to capture carbon emissions can be fitted in the future. The plan to build Kusile, and its twin Medupi, in Limpopo province, dates back to the immediate aftermath of the repressive racist apartheid regime. Conceived as energy providers for a growing and free nation, they were seen as powerful statements of a new commitment to a modern economy that would improve the lives of all South Africa’s citizens. Kusile means “New Dawn” in Zulu, a local language. In recent years, South Africa has been hit by severe power shortages, leading to rolling outages. Though these have now eased, in part due to renewable energy sources supplementing supply, local officials say that Kusile is still essential to ensure the developing nation’s energy security for decades to come. But circumstances – and attitudes – have changed since the original decision was taken to build the vast plants. “Medupi and Kusile are examples of large-scale mega infrastructure projects that countries see as the basis of a development model that started after World War II. Projects this large are seen as transformational. They cost a lot. They employ a lot of people. Their effects are meant to be big. But it’s a model that doesn’t make much sense now,” Janet Redman, director of the climate programme at the Institute for Policy Studies in Washington DC said earlier this year. “Using coal for energy is hugely expensive, outdated, against international trends and is financially and environmental irresponsible,” said Robyn Hugo of the Centre for Environmental Rights, a local NGO. According to one estimate the total cost of the twin projects of Kusile and Medupi could eventually top $32bn. Medupi relies in part on a $500m loan from the African Development Bank and also $3bn from the World Bank, approved in 2010. Both projects have been plagued by allegations of corruption. All concerned deny any wrongdoing. Kusile alone is projected to emit an estimated 36.8m tonnes of CO -equivalent, according to Eskom’s own estimates. With Medupi, it will add 16% to South Africa’s current CO emission levels. The impact on local towns and villages will be immense. It is not simply the power station itself, and the air pollution and traffic it will generate, but the vast coalmining operations needed to provide the estimated 17m tonnes of coal Kusile will require each year. Farmland and wetlands will disappear as new open-cast and underground mines are opened or, in some cases, reopened. Tens of thousands of impoverished labourers will swell some settlements. Others will have to be entirely shifted to new locations. Roads will be built, bringing access and jobs for some, but exacerbating environmental consequences. This is far from pristine farmland or wilderness, however. Central Mpumalanga is the site of a dozen power stations and a huge mining industry. One of the major complaints of local communities is that local men are rarely hired by companies for anything but casual labour because already acute air pollution has, they claim, damaged their lungs. Mpumalanga is already designated as a zone of acute air pollution in South Africa. Locals complain of sinus infections, headaches and coughing children. Sibongile Sibeko, who has lived in the community of Arbor all her life said her three daughters and two sons had all suffered respiratory illnesses which local doctors blamed on “dust”. She lives in a small three-roomed hut only a few metres from waste spoil marking the boundary of a major mine, operational for around five years. The Kendal power station, Africa’s biggest, is close by. It has been operational since the early 1980s, is coal-fired and has a capacity of more than 4,000MW. “The doctor saw my little one – my four-year-old – recently. He said his chest was closing because of the dust,” Sibeko said. Then there is water. Among the impacts of Kusile will be the destruction of important wetlands around the plant. Massive infrastructure including pipelines and canals has been constructed to bring water for cooling to Kusile, but the plans were conceived in a period when water was more plentiful. South Africa is currently experiencing its worst drought for 50 years, which some blame on climate change. In all villages around Kusile, there are complaints of lack of water, deforestation and other environmental and social problems, ranging from higher crime levels to overcrowded schools, linked to the influx of workers. “Before the mine came we had wood from forests and water from boreholes, and we grew vegetables in small gardens. We had goats, cows and chickens and there was a white farmer and people here worked on his land. But there are no jobs in farming now and there is no forest and the boreholes are dry or the water is bad, and there is no space for livestock or even our gardens because of all the people who have come,” Sibeko said. Another nearby village, cut off from the main highway by a strip of dry grass strewn with cider bottles and rusting cans, is often shaken by the blasting at the nearby mine. “There is a lot of dust here, especially when they are blasting,” said Patricia Mabaso, 30. “The old people and the children get diseases from it. Once it was all green round here, now it’s a desert.” The Energy and Environmental Reporting Project is supported by the Blanchette Hooker Rockefeller Fund, Energy Foundation, Open Society Foundations, Rockefeller Brothers Fund, Rockefeller Family Fund, Lorana Sullivan Foundation and the Tellus Mater Foundation. The funders have no involvement in or influence over the articles produced by project fellows in collaboration with The Guardian.
News Article | November 4, 2015
In a stock exchange notification on Wednesday, the company said its board of directors will meet on Monday (November 9) to consider giving a maiden interim dividend to its shareholders. Currently, the company has a little over 37 lakh retail investors. Since its IPO in 2008, the company has not announced a dividend payment. However, immediately after the public issue, the company had announced bonus shares to the non-promoter category, with a view to protect them from the impact of a sharp slide in the share price. Reliance Power came out with an initial public offering at ₹450 a share, raising ₹11,500 crore, one of the biggest IPOs in Indian history. The company announced three bonus shares for every five shares held in the company. But that amounts to hardly anything for retail investors, as the share price has been on the downward slope. In fact, in August this year, the stock registered its all-time low of ₹33.10. The stock of Wednesday closed at ₹51.40, up 3.94 per cent, on the BSE. In 2010, Reliance Power merged another group company Reliance Natural Resources with itself. However, after hitting the low, the stock has been on the recovery path, thanks to a slew of positive news flows. A few days ago, the Delhi High Court had quashed the Delhi Government’s plea for an audit of power distribution companies in the national capital by the Comptroller and Auditor General (CAG). On Monday, the company had reported 36.57 per cent jump in net profit to ₹345.63 crore for the quarter ended September 30, on higher electricity generation as against ₹253.07 crore posted in the year-ago period. Total income also increased to ₹2,766 crore (₹1,783.24 crore). For the first half of the current fiscal (April-September), consolidated net profit rose 38.7 per cent to ₹689.97 crore (₹497.42 crore). The government’s thrust on major power sector reforms has also revived the sentiment. However, a retail investor, who bought the shares immediately after the IPO from the secondary market, said he is sitting on a huge loss, despite cost-averaging the share in the last few years, as the stock has been hitting new lows with each passing year. “More than a dividend, if the stock price revives quickly I would be happy,” he said and added he wish to hold the stock for quite long-term.
News Article | November 3, 2015
are likely to open higher in today’s trade mirroring a firm closing on the Wall Street with S&P500 index ending above 2,100 level for the first time since August. Meanwhile, European peers also had a positive finish on good reading. Stock specific action is likely to be seen during the session as some of the prominent companies including Power, DLF, IndianOil, GAIL, Tech Mahindra, Reliance Power and PVR post their quarterly results today. Coal India recorded an output of 44.37 million tonnes during the month of October, according to a filing on the BSE. Greaves Cotton reported 91% increase in its net profit at Rs 52.24 crore for the quarter ended September 30, 2015 as compared to Rs 27.29 crore for the corresponding quarter last year. Brigade Enterprises posted a net profit of Rs41 crores up by 102% for the second quarter of the current fiscal as compared to the same period last year. Adani Ports and Special Economic Zone posted a 16 per cent increase in its consolidated net profit to Rs 667 crore for the September quarter on increased income from operations. Adani Enterprises posted a consolidated net profit of Rs 299 crore down by 40 percent for the second quarter ended September 30. Blue Star acquired 51 per cent stake in Oman Electro Mechanical Contracting, a 100 per cent subsidiary of W J Towell. Banks are likely to remain in focus after Global rating agency Moody’s on Monday said it expected a gradual improvement in the working environment as it upgraded its outlook for India’s banking system from negative to stable. United Spiritsreported second quarter profits of Rs 929.3 crore on windfall of Rs 853.6 crores by selling shares of United Breweries held by the company. Reliance Capital posted a 15 per cent year-on-year increase in consolidated net profit at Rs 250 crore for the September quarter, helped by growth in general insurance and asset management businesses. Oriental Bank of Commerce reported a 3.4 per cent growth in net profit on an annual basis on account of s pick-up in the credit demand. Net profit stood at Rs 301 crore, up from Rs 291 crore a year ago, results for the July-September quarter showed. Indian Bank posted an 18 per cent growth in net profit at Rs 369 crore during the September 2015 quarter, compared to Rs 314 crore in the year-ago period. TVS Motor Company reported a 14% growth in sales for the month of October 2015 with total sales increasing from 241,044 units recorded in the month of October 2014 to 274,622 units in the month of October 2015. & are eying at jointly setting up a multi-billion dollar petrochemical plant in Andhra Pradesh. Asian share markets are trading higher today tracking a strong closing on the Wall Street helped by gains in energy and health care stocks.Mean while, a holiday in Japan kept currencies tethered within recent tight ranges. Also, European stock markets erased earlier losses and finished higher on Monday after a gauge of factory activity for the eurozone unexpectedly improved.
News Article | February 15, 2015
India said cheaper credit along with foreign investment will help the world’s third-largest polluter fund an ambitious renewable energy program that would build green power plants faster than China. Power Minister Piyush Goyal’s comments shed some light on how the government expects India to afford targets outlined at a conference in New Delhi on Sunday for 170 gigawatts of clean energy by 2022. That would be a fivefold rise and exceed the total power capacity of most nations. India relies on dirty, coal-fired plants and has some of the planet’s most toxic air. “Interest rates will come down,” Goyal said on the sidelines of the conference, adding he sees a greater role for overseas funding sources in part as stability in the rupee cuts the cost of hedging currency risk. “A lot of international money is available for renewables. We need to tap that.” Prime Minister Narendra Modi, in his conference speech, said the clean-energy drive is part of a push to curb blackouts and give every Indian household electricity. While world leaders such as U.S. President Barack Obama back the effort to harness power from the sun, wind and water, finding the $200 billion Goyal estimates is needed remains an obstacle. “Who’s going to pay for all this?,” said Sunil Jain, the chief executive officer of Hero Future Energies. Indian banks “aren’t capitalized for this kind of lending,” he said. Modi’s administration announced plans at the conference, called RE-Invest, for renewables to account for 15 percent of India’s energy mix within a decade. It said banks have committed to finance more than 3 trillion rupees ($48 billion) of projects and that manufacturers intend to set up 60 gigawatts of equipment production capacity. State Bank of India, the country’s largest lender by assets, said it can finance 750 billion rupees by 2020 depending on the viability of the proposals. Lower hedging expenses could cut the total cost of overseas loans to 6 percent to 7 percent in the next two years, the power minister said. At home, the Reserve Bank of India left interest rates unchanged this month following an unscheduled cut in January to 7.75 percent after inflation eased. “The trend of reducing interest rates has already started and interest rates will come down,” Goyal said. Modi’s nine-month-old administration will try to support steps such as green bonds, he said, adding he’s confident that pension funds can be wooed into renewable investment. “We are developing a framework which will make sure policies are stable and that the bankability of renewable power purchase agreements are ensured,” Goyal said. Modi has moved clean energy up the national agenda since he took office in May. At the same time, the United Nations is pushing rich and poor countries alike to adopt targets in time for a climate summit in Paris in December. “If there is one nation that can show the world how to fight global warming, it’s India,” Modi told the conference. In November, China and the U.S. reached a landmark agreement to cap emissions, a step that India has resisted. China is the world’s largest renewable energy market. Adani Enterprises Ltd., Reliance Power Ltd. and SunEdison Inc. are among companies that have pledged to invest in India’s solar industry in recent weeks. While investment plans are multiplying, the question remains whether and how rapidly they can be implemented. Stressed assets at India’s banks, including soured debt and restructured loans, will rise to almost 13 percent of total advances by March 2016, the highest level since 2001, forecaster India Ratings & Research Pvt. estimates. “For the foreseeable future, India will be reliant on coal,” Arvind Subramanian, the chief economic adviser in India’s Finance Ministry, said at the conference. The focus on renewables is taking funds away from efforts to find less-polluting ways to burn coal, he said. Goyal said the government envisages a role as a “facilitator” in India’s renewable power expansion, rather than as part of the business model “Banks will provide their funds privately to businesses,” he said.
News Article | May 11, 2015
When two children are fighting on the same piece of chocolate, how would a mother play a mediating role between them? Either she will buy a new chocolate for the other child or just divide that sole piece of chocolate into two equal parts to be distributed between both the children. What did Kokilaben do in case of feuding Ambani brothers? Read on… When it came to feuding Ambani brothers, Kokilaben had no other option but to move forward with the latter case scenario of dividing equally the fortunes of the humungous empire of the Reliance Group which was built under the leadership of late Dhirubhai Ambani. In June 2005, Mukesh and Anil Ambani signed a MoU to reorganize Reliance Industries, in order to take over reins of different assets and businesses of the group under their individual domain. The most significant aspect of the MoU was that RIL promised to supply 28 million cubic meters of gas for 17 years at $2.34 mmBtu to Anil Ambani’s RNRL. However, the MoU came under dispute subsequently in 2007 on government setting up a price of $4.20 mmBtu for gas contracts in the KG Basin fields. The core business of the group in the form of energy and petrochemical business was pocketed by Mukesh Ambani, while the junior Ambani inherited Energy, Financial services in form NBFC business and a newly developed but fast emerging Telecom business of the Reliance Group. At this point in time, during the process of de-merger, the fortunes of the group were distributed equally between the two estranged brothers. Anil who had finance-related acumen was more than content while inheriting business of Reliance Capital, apart from group subsidiaries such as Reliance Infrastructure (Power business), Reliance Communications (Telecom business) and not to mention RNRL – somewhat a shell company with interests in marketing of natural gas. On the other hand, Senior Ambani was happy with the group’s core business of Petrochemicals where Mukesh excelled in terms of technical know-how and interests. However, as time passed, both the brothers made efforts to expand and diversify their businesses post de-merger. Anil Ambani had dreams to construct a mega Rs.28000 crore power project at Dadri powered by a cleaner fuel in form of gas, in contrast to coal fuelled projects under the portfolio of Reliance Power. On the other hand, Anil also diversified with mega-infrastructure projects including metro rail projects under the portfolio of Reliance Infrastructure. The Junior Ambani also became active in the space of Media and Entertainment by acquiring Ad-labs Films Ltd. However, Senior Ambani moved along the lines of his traditional strength of Petrochemicals business. He came up with a new company in the form of Reliance Petroleum (RPL) and created the world’s most envied Petroleum Refinery in Jamnagar. Later, this company was merged with the parent company Reliance Industries. Mukesh also came up with subsidiary involved in new-age concept of Retailing under Reliance Retail, Reliance Trends, Reliance Jems & Jewels and Reliance Digital. At the time of de-merger, both the brothers departed amicably with equal distribution of the Group’s fortunes between the estranged brothers. From here, it remained on both the brothers as to how they expand their individual empires along with the crucial support of their shareholders and other stake holders. Even as both the brothers started off as equals, their groups under the leadership of individual Ambani brothers have moved forward in their respective line of businesses but in different directions of claiming fortunes. Mukesh has been growing in strength by every passing year, while Anil Ambani has lagged quite a bit over the last 5 years. Mukesh’s wealth has surged to roughly around $29 billion even as Anil’s fortunes are stuck at $14 billion, a whooping half that of his senior brother’s standing. In fact, before the global recession was witnessed a couple of years back, the difference in fortunes of the feuding brothers stood around $10 billion. Since then, the market capitalization of Anil Ambani’s Reliance Capital and Reliance Communications has taken a severe beating, even after the current sharp recovery in the Indian benchmark indices. This has widened the gap in the fortunes of both the brothers from $10 billion during pre-recessionary period to $15 billion post-recovery. Let us have a look at how the individual companies of Junior Ambani’s ADAG group have performed over the last few years: The business under Reliance Communications which was seen as fast emerging telecom business before the de-merger – fared poorly over the last couple of years speaking in line with relative performance in terms of market capitalization of the company on the Indian bourses. The telecom industry remains completely bogged down by the intense price wars and over-crowded capacity of the sector. The company was also alleged by DoT for misallocation of revenues in its accounting practices. The stock price of the company is way below the peaks levels of around Rs.800 witnessed during the peak of the previous Bull Run, currently at depressed Rs.150 levels. The business under Reliance Capital has somewhat been the star performer for the Anil Ambani’s group. The company’s insurance business has been one of the fastest growing companies under private insurance space. The premium from the insurance business has surged more than five times over the last 3 years. On the other hand, Reliance MF is still a leader with nearly Rs.1 lakh crore in assets under management. Reliance Growth scheme of the group still remains one of the most admired mid-cap funds among the retail investors. More recently, RBI has allowed entry of new players for granting of banking licenses to private sector entities and NBFCs to enter into the commercial banking space. Reliance Capital could be one of the key beneficiaries of this new announcement as it intends to tap pan-India banking business. However, the stock price of Reliance Capital has remained depressingly low around Rs.700, as against the peak level of around Rs.2500 witnessed during the previous bull phase. This depressing market capitalization levels has exerted pressure on the valuation of the company from pre-crisis levels. At the peak of the previous bull run, Reliance Infrastructure (REL) had come out with the IPO of its power related subsidiary Reliance Power, which saw a huge rush of retail investors to grab on the future power story of the Reliance group. However, what followed later is no secret to anybody reading this article. The crash in the stock price of Reliance Power has halved the valuation and market capitalization levels of both Reliance Power and REL, in the process disappointing investors with unprecedented losses in IPO of Reliance Power. After transferring the power related business into its subsidiary Reliance Power, REL shifted its attention and involvement into major infrastructure projects including mega metro rail projects. The market capitalization of REL is way off from its peak levels of around Rs. 2200 witnessed during the frenzy of Reliance Power IPO. I’ve taken the analysis of both these companies together as their fortunes are somewhat linked with each other. Reliance Power has plans to built 35000 mega watt of green-field power generation projects. Anil Ambani has planned the biggest power project of all at Dadri, with expectation of supply of gas through RNRL, originally sourced from RIL, at $2.34 mmBtu as per the MoU signed in 2005. However, in its recent verdict the apex court has directed that the private MoU signed between the feuding Ambani brothers cannot be upheld against the PSC agreement signed with the government, the owner of the gas. This verdict has come as a big jolt to the junior Ambani camp whose costs for their ambitious power project could escalate dramatically to $4.20 mmBtu as per the price fixed by the EGoM. Specifically speaking about RNRL, if the case would have been gone their way, it could have translated into a profit of Rs.3000 crore a year for this gas company. However, the negative verdict renders this company into a near shell company with some coal based methane blocks under its portfolio. To conclude, post de-merger and to some extent even recently witnessed global crisis, the valuations of all the ADAG group companies have been a laggard in terms of market valuations and even performance wise. On the other hand, the performance of Mukesh’s RIL has remained stable and sound all this while except that the company’s Gross Refining Margins (GRM) took a small hit on account of recessionary impact of fall in demand of crude oil. However, the demand and GRM are likely to scale higher gradually, as optimism returns in the global markets. Will Anil Ambani’s ADAG Group of companies recover any time soon?
News Article | May 25, 2015
While I settle down to write this article, I find myself pre-occupied with the apprehensions as to how the battle of Ambani brothers has proceeded dramatically over the last few years [Reliance & Ambani Brothers – Past, Present & Future…], possibly, depicting all the suspense and tweaks of a Bollywood movie. It all started with the dispute taking a bitter turn where the junior Ambani initiated an aggressive print media campaign against the Petroleum Ministry, while placing his views and concerns over the issue in front of the public and its shareholders. It was, simultaneously, followed by a long ensuing battle in the court of law over the RIL-RNRL gas pricing dispute case. The apex court ruling has, rightly, adjudged the case in the favour of Reliance Industries and the government’s right of ownership over the gas; and directed both the brothers to again meet on the table to renegotiate the gas supply master agreement but within the purview of government’s Gas Pricing Policy. Now, the battle is being touted of having reached a happy ending. ;) In a press statement, both the companies announced the end of the non-compete agreements between the two business groups. Further the statement highlighted more harmonious and collaborative moves between both the companies. This led to a spike in the share prices of ADAG Group stocks. RNRL spurted 22%, Reliance Power was up 10% and Reliance Capital was up 5%, all this in a falling market pre-occupied with the European concerns and chances of double dip recession in the US. Have markets pinned up a hope for a better renegotiation terms for RNRL, on the back of the patch-up news. Is it a case of misguidance for the investor community or the speculative built-up that had led to such a spike in the share prices of the ADAG stocks? The question lurking my mind is, if both the brothers were to come out with such an amicable solution, why didn’t both of them show efforts to solve the dispute with out-of-court settlement? I suppose one reason for this could be since RNRL was a defendant of sorts in this case to protect the MoU agreed price of $2.34 mmBtu for the supply of gas from RIL, Anil Ambani could have gone for an out-of-court settlement, subject to Mukesh Ambani’s willingness to do so. However, RIL had little to lose from the case from what had been already agreed in the private MoU between the two brothers at the time of demerger. So, one can assume that RIL could have been a more reluctant party to opt for an out-of-court settlement and that the government was always standing on the sidelines to make the RIL case stronger. One can argue that with the apex court adjudication, the contours of the broad pricing formula and the ownership dispute gets resolved with a resounding clarity. This could be the guiding force for both the brothers to come back on the negotiation table. However, if the above argument is to be held true, than one thing is for sure that RIL is hardly going to budge in terms of the government approved gas price of $4.20 mmBtu. At best, for RNRL, it could be in the form of some negligible discount once they’re on the negotiation table. It could be foolhardy to think that with this amicable solution between the Ambani brothers, ADAG group company RNRL will receive any favourable treatment from Reliance Industries, now that the Supreme Court has ruled in its favour. Under such scenario, possibly, it could auger well for the ADAG as a group over the longer duration. On the other hand, RNRL could, at best, receive some discount from RIL, but there’s nothing to cheer in a big way for the RNRL shareholders. What’s your view on the implications of the latest news of Ambani brothers patch up?
News Article | March 5, 2015
Nine Indian companies, including Bosch, Aurobindo Pharmaceuticals and Yes Bank, will be included in the large cap segment in FTSE Group's Asia Pacific (excluding Japan) Index later this month. Other companies are Eicher Motors, Motherson Sumi Systems, Zee Entertainment Enterprises, Godrej Consumer Products, Shree Cements and Cadila Healthcare. "The changes will be effective after the close of business on Friday, March 20, 2015 (on Monday, March 23)," FTSE Group, a global provider of stock market indices, said in a statement yesterday. With the inclusion in the index's large cap segment, these stocks are expected to see more foreign fund flows. Four Indian companies -- NHPC, Reliance Communications, Reliance Power and Jindal Steel & Power -- have been excluded from the index's large cap segment. FTSE Asia Pacific ex Japan Index is one of a range of indices designed to help investors to benchmark their Asia Pacific investments. This index comprises large and mid cap stocks providing coverage of the developed and emerging markets in Asia Pacific excluding Japan. It is derived from the FTSE Global Equity Index Series (GEIS), which covers 98 per cent of the world's investable market capitalisation, according to FTSE Group.
News Article | February 12, 2015
JAIPUR: Anil Ambani-led Reliance Power announced it has signed a memorandum of understanding with the Rajasthangovernment to develop a 6,000 MW solar park in the state over the next 10 years. "Reliance Power signs MoU with the government of Rajasthan to develop 6,000 MW of solar power projects," the company said in a release. The MoU was signed by state Chief Minister Vasundhara Raje and Reliance Power chairman Anil Ambani. Raje also dedicated Reliance Power's 100 MW Concentrated Solar Project (CSP) in Rajasthan, at Pokhran in Jaisalmer district, to the nation. Rajasthan Sun Technique Energy, a wholly-owned subsidiary of Reliance Power, was awarded the CSP project in 2010 based on a international competitive bidding, the company said. "The CSP plant is expected to generate about 250 million kilowatt hours of clean and green energy annually, equivalent to consumption of 230,000 households," the statement said. Reliance Power has the largest portfolio of power projects in the private sector based on coal, gas, hydro and renewable energy with an operating portfolio of nearly 6,000 MW, it added. Also Read: Star India To Acquire Broadcast Business Of Maa TV Anil Ambani's Reliance Group Forays Into Defence
News Article | June 17, 2015
The reconciliation between the estranged Ambani brothers was followed by the scrapping of the non-compete agreement allowing both the group companies to foray into newer industries (except that Mukesh-led companies should not venture into gas power plants till 2022), where either of the two Ambani bandhus already have their active presence. The only apprehension in the mind of shareholders of Reliance Group companies would be as to why was this amicable solution not reached before the tussle in the court of law? This would have certainly saved crores of investor’s money that went into litigation purposes and paying those fat cheques to the most-admired legal representatives of both the group companies. Now, that the patch-up is in place, ADAG stocks have flared up smartly during the last 15-20 sessions on the bourses. Let’s compare the stock prices from the intra-day lows of May 21 to the closing levels as on June 16 for all the ADAG counters. Reliance Capital has surged from lows of Rs.611 to Rs.758, a rally of 20%. In fact, Reliance Communications has rallied 40% from the trough levels of Rs.133 to a whooping Rs.187. Reliance Power had zoomed from Rs.138 to Rs.175 to register a gain of 27% from the lows. RNRL has spurted from Rs.44 to Rs.68, an up-tick of 55% from the depressed levels. From the frenetic evidence of the sudden surge in stock prices of ADAG counters, it is clear enough that markets are factoring in an amicable outcome for the settlement of the gas price dispute between RNRL and RIL. The market participants are sensing that both the brothers will co-operate with each other and may also pave the way for a collaborated growth journey in synergies with each other whosesoever possible. ADAG stocks such as Reliance Capital and Reliance Communications have provided negative returns to the investors since the market recovered post global recession. More recently, the stock of Reliance Communications has gained on the back of news that the company is looking to spin off its tower business. The cash-starved telecom company is eyeing a strategic stake sale to global telecom majors which would top-up the company’s requirements for funding 3G expenses and infrastructure. Also, the AGM of Reliance Industries is scheduled on Friday and expectations are galore that some positive announcement may come up on this occasion. Speculation is rife that younger sibling shall attend this meeting and, probably, Mukesh-led RIL will announce minority stake in a couple of ventures of the ADAG.
News Article | February 24, 2015
As Prashant Lokhande arrived for work at India’s oil ministry two months ago, he discovered his office door open and the lock broken. Lokhande, a deputy secretary who helps oversee oil and gas exploration in the ministry, found nothing missing from his office. He immediately reported the incident to his bosses, according to two officials in the ministry who asked not to be identified discussing details of the case. The incident was by far the most serious sign that the ministry had a leak, triggering a probe that has led to 14 arrests, including employees of energy companies owned by some of India’s richest men. Similar to Chinese President Xi Jinping’s anti-graft campaign, Indian Prime Minister Narendra Modi’s moves to stamp out corruption may redefine relationships between big business and government bureaucrats. “This investigation could completely change the way ministries function, not just the oil ministry, but it could spill over to other ministries as well,” said Kamlesh Kotak, Mumbai-based head of research at Asian Markets Securities Pvt. “Things can get nasty and heads may roll at senior levels. The investigations would go deeper, and some companies will face challenging times.” Among those held are officials from billionaire Mukesh Ambani’s Reliance Industries Ltd., Essar Oil Ltd., Cairn India Ltd., Jubilant Energy NV and Reliance Group, run by Mukesh’s brother Anil, according to police spokesman Rajan Bhagat. Since news of the scandal broke, shares of Reliance Industries have slid 6.3 percent. Essar Oil has declined 4 percent, while Cairn India has lost 5.6 percent. The investigation is spreading. Police arrested a man in Delhi’s Dwarka neighborhood and found forged identity cards for the ministries of power and coal, Bhagat said by phone today. He declined to say where he worked. The police tracked him after interrogations revealed he was involved in procuring official documents from the two ministries, according to a police statement. They found copies of various secret documents with him. A separate case has been registered, according to the statement. An additional five people were detained for questioning yesterday and a defense ministry worker was arrested today, he said. The ministry had suspected documents were being leaked “for a while,” Oil Minister Dharmendra Pradhan told reporters on Saturday, without elaborating. Bureaucrats in the oil ministry monitor billions of dollars of investments, crude imports, fuel pricing and subsidies, so any stolen documents could give companies an unfair advantage. The police have a list of as many as 60 people who frequently had phone conversations with the arrested, according to a police official directly involved in the case. They will be questioned along with more officials from the oil ministry, the person said. One morning about five months before Lokhande found his door broken, a confidential document from the office of the oil exploration department’s chief was found in a photocopier, the officials said. An internal probe at the time turned up nothing. The broken door prompted the ministry to get the police involved. Lokhande didn’t answer two calls to his mobile phone, and an assistant at his office said he wasn’t available. Police officers wearing suits and ties were sent to the ministry to pose as company officials, the police official said. They asked where they could get confidential documents and also tracked people seen often in the hallways. In the meantime, CCTV cameras were installed throughout the ministry. Police noticed they were sometimes turned off for a couple of hours after 8 p.m., the person said. After a monthlong investigation, they had enough to pounce. On the night of Feb. 17, they caught three suspects -- two of whom formerly worked at the oil ministry -- trying to steal secret documents. Bhagat declined to comment on details of the investigation. Others who were arrested include ministry officials, a journalist running a website and a consultant, with charges ranging from trespassing to theft, Delhi Police Commissioner Bhim Sain Bassi said last Friday, Feb. 20. Police are considering charges under the Official Secrets Act, which could lead to a prison term of as many as 14 years, he said. According to the police, the thefts worked like this: The officials would open offices with duplicate keys, disable any CCTV cameras and photocopy every document sitting on the desks. They then sold them to private petroleum companies and consultants. The rooms that were raided included the offices of the director for exploration and the joint secretary for refineries. The police took locks with them as evidence, leaving gaping holes in the doors. New locks have now been installed. The documents the police recovered included details of exploration sites, natural gas pricing and the ministry’s arbitration with Reliance Industries, the Indian Express reported Feb. 21, citing unidentified police sources. Billionaires who own companies at the center of the investigation include Mukesh Ambani, India’s wealthiest man, and Anil Ambani. Billionaire brothers Shashikant and Ravikant Ruia own Essar, while Anil Agarwal’s Vedanta Resources Plc controls Cairn India Ltd. Reliance Industries is conducting an internal inquiry, Tushar Pania, a spokesman for the Mumbai-based company, wrote in an e-mail on Feb. 21. An Essar employee is being held and the company is cooperating with authorities, Manish Kedia, an Essar spokesman in Mumbai, said in an e-mail on Sunday, Feb. 22. Reliance Power Ltd. is not aware of the circumstances leading to the arrest of its employee and will cooperate with investigators, Reliance Group said in a Feb. 23 e-mail. E-mails to Cairn India spokesman Arun Arora and corporate communications team of Jubilant Energy NV remained unanswered. Allegations of graft and crime have long shadowed Indian officialdom, including past scandals over the sale of airwaves and the allocation of coal deposits. Modi’s party swept to power last May partly on a pledge to fight corruption and improve the efficiency of the civil service.