New Delhi: Reliance Industries Ltd (RIL) will demerge its engineering, procurement and construction (EPC) business to create a focused entity catering to the group's EPC needs, the firm said in a statement on October 21. The board of the company headed by Mukesh Ambani "approved a scheme of arrangement under which the EPC and infrastructure undertaking of Reliance Projects and Property Management Services Ltd (RPPMSL), a wholly-owned subsidiary of RIL is proposed to be demerged into RIL," it said.
This demerger, together with the existing EPC team in the company, creates a focused EPC undertaking in RIL to cater to the needs of the group.
The current EPC resources of RIL group are spread across different operating entities. RIL has around 4,000 engineers with proven expertise across engineering, procurement, project management and construction. RPPMSL also has a team of 20,000 professionals.
Separately, the firm has also announced that it will demerge its financial services business and list it on stock exchanges under the name Jio Financial Services (JFS) on October 21.
RIL shareholders will get one share of JSF for one share held in Reliance.
On the EPC demerger, the firm said the focused EPC undertaking will aggregate and synergise engineering capabilities and expertise of the group.
RIL had a turnover of Rs 445,375 crores in the fiscal year ending March 31 while the EPC and infrastructure undertaking of RPPMSL had a turnover of Rs 43,071 crores.
Reliance is in the midst of a massive spending drive, rolling out 5G or fifth-generation telecom services, building five giga factories to manufacture solar modules and hydrogen electrolysers, and expanding retail operations as well as traditional pet-chem business.
"Increasing infrastructure spend across geographies in oil and gas, chemicals, telecom and renewable energy sectors is expected to drive significant demand for EPC resources," the firm said.
The new EPC undertaking will facilitate internationalisation by setting up EPC Centres of Excellence at strategic offshore locations. It will align with existing subsidiaries of RIL in the US and Dubai. It will also incorporate new subsidiaries in Singapore and the UK.
These subsidiaries will enable faster mobilisation of high-quality talent and EPC resources in an increasingly constrained global EPC environment.
(With PTI inputs)
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