Reliance Industries Ltd. (RIL) has hired Navin Wadhwani, currently managing director at NM Rothschild and Sons (India) Pvt. Ltd., to head its M&A division. Manoj Modi, a close aide of Mukesh Ambani, confirmed the news but hasn’t commented on it per se. This appointment is in tune with RIL’s plans to diversify into newer areas with the $9 billion profit in its coffers.
Mukesh Ambani, in his annual report to shareholders for the 2010-11, outlined the fact that the corporate giant was gearing up for the next phase of growth by launching their own initiatives as well as by forging fruitful partnerships with leading companies.
Navin Wadhwani will set up a dedicated M&A team for the group, hitherto being managed by Manoj Modi & Alok Agarwal. Having accomplished such huge market cap and profits RIL would like to target inorganic growth too by acquiring successful businesses. Mr. Wadhwani, who has around 20 years of experience, joined NM Rothschild in 2003 to develop and expand the firm’s corporate advisory coverage in the utilities, infrastructure and transportation sectors. Mr. Wadhwani has specialized in advising on financial restructuring in the electricity and infrastructure industries. Before joining Rothschild, Mr. Wadhwani was with Arthur Andersen’s corporate finance division for 10 years. He also worked with Grindlays Bank for a year.
According to a February report, by HSBC Securities & Capital Markets, Reliance Industries will generate $ 22 billion in cash by the year 2012. This year it generated $ 7.2 billion in cash by its offloading of a 30% stake in oil & gas production sharing contracts in India. It also announced its intention of acquiring a major foothold in the Indian telecom scene by its takeover of Infotel Broadband Services. In February, RIL made its third shale gas purchase, taking the total investment made in such assets to $3.44 billion for a potential 25.4 trillion cubic feet of natural gas trapped in the rock.
In March, RIL formed an equal joint venture with U.S.-based investment and technology development firm DE Shaw and Co. LP, the world’s largest hedge fund manager. In June, RIL announced a deal to buy out Bharti Group’s 74% stake in two insurance joint ventures with France’s AXA Group for an undisclosed sum. For the quarter ended June, net profit rose 16% to $1.28 billion.
It seems that Reliance has charted out an immediate growth plan and looks armed with its massive profit margin to ensure higher returns for its shareholders.