On Monday, shares of Reliance Industries fell over 4.2 percent to an intraday low of 2,368.20 on the BSE after the country's largest company decided to halt a stake sale in its oil-to-chemicals business (O2C) to Saudi Arabia's Aramco and back away from a potential spinoff of its most profitable unit.
In August 2019, RIL and Saudi Aramco signed a non-binding Letter of Intent for Saudi Aramco to purchase a 20% share in Reliance's O2C business. Despite Covid's limits, both teams put in tremendous work in the due diligence process over the last two years.
Reliance recently announced its intentions for the New Energy & Materials companies, including the building of the Dhirubhai Ambani Green Energy Giga Complex in Jamnagar, which accounts for a significant portion of the O2C assets. It will be one of the world's largest integrated renewable energy manufacturing plants.
Since June of last year, the company has been debt-free. According to Jefferies analysts, the deal cancellation has no impact on Reliance's balance sheet, but it is disappointing because it misses out on a chance to create a $75 billion value benchmark for the O2C sector.
Due to the changing nature of Reliance's business portfolio, the two companies have agreed that it would be beneficial for both to re-evaluate the proposed investment in the O2C company in light of the new circumstances. As a result, RIL has withdrawn its existing application with NCLT to separate its O2C company from RIL, according to a statement.