Archive for October, 2014

IMG-Reliance Along with BFI Launches School & College Basketball Leagues

October 21, 2014

After the successful start of the Hero Indian Super League (ISL), the joint venture between the International Management Group (IMG) and Reliance Industries Limited (RIL) has started exploring another sport. The promoters of ISL have started promoting grassroots level basketball by launching two leagues along with the Basketball Federation of India (BFI).

By launching two properties, namely the Indian School Basketball League (ISBL) and the Indian College Basketball League (ICBL), IMG-Reliance along with BFI intend to instill basic knowledge of the sport at the grassroots level. The long term goal of this initiative is to cultivate talent that adheres to national standards.

Chief Executive Officer of BFO, Mr. Roopam Harish Sharma said, “We need to catch the players young and train them. The idea to start this league is to identify the best players and train them for international level.”

The partnership between these two organizations includes a 30 year commitment where IMG-Reliance will help develop this sport all over the country. In addition to this, BGI has granted IMG-Reliance commercial rights for sponsorship, advertising, merchandising, broadcasting, film, intellectual property franchising and new league rights as a part of this partnership.

Off to a Favorable Start

These two leagues were conceived in Delhi and Indore after which a series of matches were played in cities such as Hyderabad, Raipur and Dehradun. The league matches started in Mumbai on October 17th and are currently being played at the Khalsa College. Divided into sub leagues, namely Premier and Challenger, the ICBL will be played in 9 tier 1 and 9 tier 2 cities. The ISBL too, has been divided into two sub leagues.

Referring to the progress of the league, Mr. Roopam Harish Sharma said, “Mumbai is a very active city, full of life and energy. We are looking forward to an exciting display of matches as ICBL and ISBL. The response received so far has been positive from the end of all teachers, students and parents. I am very confident that a revolution will soon be created in the history of basketball in India.”

According to the Chief Operating Officer of IMG-Reliance, Mr. Ashu Jindal, India is currently witnessing a revolution with regards to sports. Considering that basketball is the second most popular sport in the world, he believes that it deserves a fair share of support and push. He added, “These two leagues are being played across 22 cities, designed to provide the youth a platform on pan-India basis.”

The ICBL currently consists of more than 450 colleges and over 6000 participants. It is expected that 700 schools from across the nation will participate in this program. The city champions from the ICBL premier league will move on to play in the national championships that will be organized at the end of this year in New Delhi. In the boy’s category, Podar College was beaten by Jhunjhunwala College while VJTI College won the match against Vaze College in the girl’s category.

The winning teams of the championship will their basketball courts completely refurbished while the first and second runners up will receive a prize of INR75,000 and INR50,000 respectively.



After Posting a Profit Rise, RIL Plans to Invest $9 Billion

October 14, 2014

The world’s biggest refinery, operated by Reliance Industries Limited (RIL) recently reported a rise in profits that exceeded its forecasts. The company reported a 1.7% rise in net profit for its fiscal quarter ending September 30. The company reported a stand-alone profit of INR57.42 billion. This is excluding RIL’s interests in retail and other small segments. This beat the average forecast of INR56.34 billion that was polled by analysts.

The company’s retail business posted its first annual profit in the last fiscal year. After 6 years of making losses, the revenue from this business rose 20% in the quarter when compared to performances a year ago. RIL is optimistic about this business and expects it to grow by 25% to 30% annually. They also believe that e-commerce will be an integral part of its strategy in the future. Co-CFO of RIL, V Srikanth said,“There are some internal discussions that are happening. E-commerce will clearly be a part of the retail strategy.”

Finally, the upstream oil business of RIL posted its second consecutive quarter of double-digit revenue growth. This comes after 3 years of declines that are now boosted by a 34% increase in revenue from its shale gas operations in the United States.

RIL’s Investment Plans

Under the stewardship of Chairman and Managing Director, Mukesh Ambani, RIL has been expanding beyond its core refining and petrochemicals business by investing in consumer-focused sectors such as telecommunications and retail. Owing to stronger refining margins, the company further announced that it would invest up to $9 billion over the next quarters in various business categories.

In its refining and petrochemicals business, the gross refining or profit margin from each barrel of crude oil refined was $8.30 in the quarter. Compared to the same time last year, the margins have gone up by $0.60 per barrel.

Mukesh Ambani said, “Renewed optimism in the domestic economy augurs well for business and consumer confidence, particularly against the backdrop of continuing concerns on global economic growth.”

Furthermore, the Co- CFO at RIL, AlokAgarwal said, “We have spent 450 billion rupees in the first six months, what we can make out is that we’ll spend probably between 500 billion to 550 billion rupees ($8.2-$9 billion) in the next six months.”

Clearing up the Roadblocks

The company is also hopeful towards a favorable decision on the price of natural gas by next month. RIL along with it partners in the Krishna Godavari (KG) D6 block off the east coast of India are in mediation with the government over the hike of gas prices that have already been delayed 3 times.

Agarwal adds, “We are taking what the government is saying very seriously that they will take a decision on gas pricing by Nov. 15.”

RIL continues to be persistent in its domestic oil and gas output as well as in calming investor concerns about the $11.7 billion investment towards 4G telecom services that are yet to be launched. The company has been working in full gear to roll out telecom services early next year.


Price Deregulation Encourages Reliance Industries to Consider Restarting, Leasing Fuel Pumps

October 7, 2014

In the hope that diesel prices will soon be deregulated from government control, Reliance Industries Limited (RIL) may restart some of their fuel pumps. In addition to this, executives aware of the development hint that the company may lease fuel retailing outlets to public-sector oil-marketing companies.

Private versus Public Players

In 2002, private companies including RIL and Essar Oil were able to capture as much as 15% of the fuel retail market. Sales declined and losses mounted when private marketers were unable to compete with the subsidized priced offered by state-owned companies such as Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation. By 2008, RIL was compelled to shut down its 1,432 fuel outlets.

RIL’s Plans to Restart its Fuel Pumps

With the re-entry of private players, the industry is expected to revive and create an environment spurring healthy competition. In light of the expectations that the prices of diesel, the most consumed fuel in India, will be deregulated, RIL is working towards developing a plan that will optimize returns.

An industry executive who is aware of the development said, “RIL has started talking to dealers to re-start the petrol pumps. Their strategy could be a mix of leasing out some pumps to OMCs and running some others on their own.”

A senior official from HPCL says, “There is an offer from Reliance Industries for leasing. But it is still to be evaluated. Some of their pumps are at a good location, so leasing them would save us cost of setting up a pump. … Once we have clarity on diesel pricing, we will look at the economics of the proposal.” Likewise, RILis waiting for better clarity on the deregulation of diesel prices.

However, official queries sent to RIL, Indian Oil and Bharat Petroleum Corporation Limited remain unanswered in this regard. Some executives at oil marketing companies (OMCs) hinted on condition of anonymity that RIL has initiated talks but the discussions are at a very early stage, where the proposals are yet to be considered by the companies.

Diesel Price Deregulation Imminent

The recent changes in the pricing regime raise hopes towards the imminence of deregulation of diesel prices. Since January 2013, the government increased prices by 50 paisa per liter each month. This move was made to cut the government’s subsidy bills.In addition to this, the global prices of fuel have also softened and the rupee has appreciated against the US dollar. These factors have helped OMCs make a profit on fuel.

If global prices continue to stay at current levels of under $95 a barrel and if the value of the rupee continues to remain stable against the dollar, consumers will further benefit with a reduction of diesel rates by INR2 to 2.50 per liter along with a policy decision to decontrol prices.