A STUDY ON SWOT ANALYSIS OF RELIANCE INDUSTRIES

LIMITED COMPANY

NAME: BHUSHAN LAVOO TORASKAR

CLASS: FY BAF
DIV: C
ROLL NO: 646
SUBJECT: BUSINESS AND SOCIETY
● INTRODUCTION:

Reliance Industries Limited (RIL) is an Indian multinational conglomerate company, headquartered in

the city of Mumbai, India. RIL's diverse businesses include energy, petrochemicals, natural gas, retail,
telecommunications, mass media, and textiles. Reliance is one of the most profitable companies in India, the
largest publicly traded company in India by market capitalisation, and the largest company in India as
measured by revenue after recently surpassing the government-owned Indian Oil Corporation. It is also the
eighth largest employer in India with over 236,000 employees. RIL has a market capitalization of US$243
billion as of October 2021.

The company is ranked 155th on the Fortune Global 500 list of the world's biggest corporations as of
2021. Reliance continues to be India's largest exporter, accounting for 8% of India's total merchandise
exports and access to markets in over 100 countries. Reliance is responsible for almost 5% of the
government of India's total revenues from customs and excise duty. It is also the highest income taxpayer in
the private sector in India. The company has negative free cash flows.

The company was co-founded by Dhirubhai Ambani and Champaklal Damani in 1960's as Reliance
Commercial Corporation. In 1965, the partnership ended and Dhirubhai continued the polyester business of
the firm. In 1966, Reliance Textiles Engineers Pvt. Ltd. was incorporated in Maharashtra. It established a
synthetic fabrics mill in the same year at Naroda in Gujarat. On 8 May 1973, it became Reliance Industries
Limited. In 1975, the company expanded its business into textiles, with "Vimal" becoming its major brand
in later years. The company held its Initial public offering (IPO) in 1977. The issue was oversubscribed by
seven times. In 1979, a textiles company Sidhpur Mills was amalgamated with the company. In 1980, the
company expanded its polyester yarn business by setting up a Polyester Filament Yarn Plant in Patalganga,
Raigad, Maharashtra with financial and technical collaboration with E. I. du Pont de Nemours & Co., U.S.

In 1985, the name of the company was changed from Reliance Textiles Industries Ltd. to Reliance
Industries Ltd. During the years 1985 to 1992, the company expanded its installed capacity for producing
polyester yarn by over 1,45,000 tonnes per annum. In 1993, Reliance turned to the overseas capital markets
for funds through a global depository issue of Reliance Petroleum. In 1996, it became the first private sector
company in India to be rated by international credit rating agencies. In 1995/96, the company entered the
telecom industry through a joint venture with NYNEX, USA and promoted Reliance Telecom Private
Limited in India. In 1998/99, RIL introduced packaged LPG in 15 kg cylinders under the brand name
Reliance Gas. The years 1998–2000 saw the construction of the integrated petrochemical complex at
Jamnagar in Gujarat, the largest refinery in the world.
 In 2001, Reliance Industries Ltd. and Reliance Petroleum Ltd. became India's two largest companies
in terms of all major financial parameters. In 2001–02, Reliance Petroleum was merged with Reliance
Industries. In 2002, Reliance announced India's biggest gas discovery (at the Krishna Godavari basin) in
nearly three decades and one of the largest gas discoveries in the world during 2002. The in-place volume
of natural gas was in excess of 7 trillion cubic feet, equivalent to about 120 crore (1.2 billion) barrels of
crude oil. This was the first ever discovery by an Indian private sector company. In 2002–03, RIL
purchased a majority stake in Indian Petrochemicals Corporation Ltd. (IPCL), India's second largest
petrochemicals company, from the government of India, RIL took over IPCL's Vadodara Plants and
renamed it as Vadodara Manufacturing Division (VMD). In 2005 and 2006, the company reorganised its
business by demerging its investments in power generation and distribution, financial services and
telecommunication services into four separate entities. In 2006, Reliance entered the organised retail
market in India with the launch of its retail store format under the brand name of 'Reliance Fresh'. By the
end of 2008, Reliance retail had close to 600 stores across 57 cities in India. In 2010, Reliance entered the
broadband services market with acquisition of Infotel Broadband Services Limited, which was the only
successful bidder for pan-India fourth-generation (4G) spectrum auction held by the government of India.
In the same year, Reliance and BP announced a partnership in the oil and gas business. BP took a 30 per
cent stake in 23 oil and gas production sharing contracts that Reliance operates in India, including the KG-
D6 block for $7.2 billion. Reliance also formed a 50:50 joint venture with BP for sourcing and marketing
of gas in India.

The number of shares of RIL are approx. 644.51 crore (6.44 billion). The promoter group, the
Ambani family, holds approx. 49.38% of the total shares whereas the remaining 50.62% shares are held by
public shareholders, including FII and corporate bodies. Life Insurance Corporation of India is the largest
non-promoter investor in the company, with 7.98% shareholding. The company's petrochemical, refining,
oil and gas-related operations form the core of its business; other divisions of the company include cloth,
retail business, telecommunications and special economic zone (SEZ) development. In 2012–13, it earned
76% of its revenue from refining, 19% from petrochemicals, 2% from oil & gas and 3% from other
segments. On 31 March 2013, the company had 158 subsidiary companies and 7 associate companies. In
2004, Reliance Industries became the first Indian private organization to be listed in the Fortune Global 500
list. The company operates world-class manufacturing facilities across the country.
As on 31 March 2018, the company had 29,533 permanent employees of which 1,521 were women
and 70 were employees with disabilities. It also had 158,196 temporary employees on the same date which
makes a total of 187,729 employees. As per its Sustainability Report for 2011–12, the attrition rate was
7.5%. But currently, the same attrition rate has gone up to 23.4% in March 2015 as per latest report
 released by the organisation.
Reliance Industrial Infrastructure holds about 45.43 percent shares of Reliance Group. It is mainly
involved in establishing and operating industrial infrastructure. RII also works for leashing and providing
services in data processing and computer software. Reliance Group is focused on positively touching the
lives of people. Further, the company believes in inclusive growth as a universal concept and conducts its
business following the same. Reliance believes that any business conduct can be ethical only when it rests
on the nine core values of Honesty, Integrity, Respect, Fairness, Purposefulness, Trust, Responsibility,
Citizenship and Caring.

● OBJECTIVES OF THE COMPANY:

1. To achieve excellence in project execution, quality, reliability, safety and operational efficiency.

2. To relentlessly pursue new opportunities, capitalizing on synergies in the power generation sector.

3. To consistently enhance competitiveness and deliver profitable growth.

4. To practice the highest standards of corporate governance and be a financially sound company.

5. To be a responsible corporate citizen nurturing human values and concern for society.

6. To improve the lives of the local community in all the projects.

7. To be a partner in nation building and contribute towards India’s economic growth.

8. To promote a work culture that fosters learning, individual growth, team spirit and creativity to
overcome challenges and attain goals.

9. To encourage ideas, talent and value systems and become the employer of choice.

10. To earn the trust and confidence of all stakeholders, exceeding their expectations.

11. To uphold the guiding principles of trust, integrity and transparency in all aspects of interactions and
dealings.

12. Appreciate the uniqueness of each customer's requirements and serve the customers with product
flexibility.
● MISSION AND VISION OF THE COMPANY:

Mission:

1. Provide millions of customers with unlimited choice, outstanding value proposition, superior
quality and unmatched experience across the full spectrum of products and services.

2. Serve the entire spectrum of Indian society i.e., from households, kiranas and traders, to small and
medium enterprises and large corporations.

3. Reach the length and breadth of the country through our physical and digital distribution
platforms.

4. Enable the choice, opportunity and livelihood of our supplier ecosystem consisting of producers,
farmers, artisans, craftsmen and manufacturers.

5. Generate direct and indirect employment opportunities with skill transformation and talent
development on an unprecedented scale.

6. Attain global best practices and become a leading power generating company.

7. Become a social responsible investor by making investment only in desirable industry.

VISION:

1. To be the most admired and successful organized retail company in India that enhances the
quality of life of every Indian.

2. To lead the industry while generating value to the stakeholders, be the pioneer in setting ethical
standard and be everyone's investor.
● SWOT ANALYSIS:

RIL is one of the most profitable listed companies in India and Reliance Industries is among the top 100
largest companies in the world 2020 in Fortune 500. RIL is also the eighth largest employer in India with
nearly 195,000 employees. On September 10, 2020, even though it is India’s largest company, it has its pros
and cons. Let us now see the SWOT analysis of Reliance Industries.

The Strengths of Reliance Industries Limited:

1. Company With Low Debt: As we already knew that in 2020 when the world experienced the
darkest moment ever Reliance Industries had sunlight with huge funding from top companies like
Google, Facebook, Intel, and So on with a total investment of over Rs 1.8 Lakh crore. Which helped
the company to pay off its debt.

2. Strong market position in various categories: RIL is the first Indian private sector company to
feature into the Fortune Global 500. With leading market position in many of its businesses, Reliance
is a business giant in India with strong positions in Textile, energy, Retail etc. Reliance has also
entered the Telecom industry in India with Jio and is sweeping the market.

3. Brand Name and financial position allow RIL to expand: Reliance is a strong brand name and
capital position which allows it to expand its businesses and also venture into newer businesses.

4. The operational advantage in refining: RIL has the world’s largest oil refinery in Jamnagar and is
one of the world’s largest private owned refining companies. With the use of latest technology,
Reliance’s refinery in Jamnagar is operationally efficient which gives great benefits for Reliance as it
gets higher yields.

5. Expansion in the retail industry: Reliance Retail (RRL) is expanding throughout the country with
putting emphasis on backwards integration. With great improvements in the value chain from
procurement from farmers to selling to customers, Reliance has increased its revenues substantially
and was the largest Indian retailer in FY 2015.

6. Reliance Jio: Reliance Jio has set the telecom industry by a storm. Reliance has laid out a superlative
infrastructure for 4G wireless services throughout the nation which has provided it with the immense
competitive advantage. Jio has also helped Reliance enhance its brand image and become a mass
popular brand.
 7. Significant Market Share: Reliance Industries holds a significant market share in all business
segments. In the telecom sector, Jio is the king, in retail Reliance Retail is the king and the list goes
on.

The Weakness of Reliance Industries Limited:

1. The decline in Productions: Reliance Industries Its major gas production comes from two of its
major plants, one is the KG-D6 project and the other is Tapti Fields which is decreasing due to
various natural and operational challenges. A decrease in production affects its supply chain and
operational margins.

2. Legal proceedings and litigations: RIL has been subjected to various legal proceedings and
litigations in the past. Recently, RIL has had to pay a hefty penalty amount to the government. Such
instances impact the reputation of the company.

3. Lack of Market Penetration: As of now Reliance Industries is focusing more on Indian markets only
which should be changed to grow more it should expand its Jio across the world.

4. Politically Vulnerable: When farmers across the country started a national strike against the
government for a new farmer bill in 2020 Reliance industries was targeted by them.

5. Lack of Market Penetration: Currently Reliance Industries is focused only on the Indian market,
which should be changed to achieve more growth should Jio expand across the globe.

The Opportunities of Reliance Industries Limited:

1. New Plants: RIL has commissioned a few new plants recently, for instance, PET resin plant and
Purified Terephthalic Acid (PTA) plant at Dahej, Gujarat. Expanding its operations facilities will
further increase production and strengthen RIL’s position in the market.

2. CBM as unconventional natural gas: CBM is a natural gas extracted from coal beds. RIL has two
CBM blocks under it and is set to utilise CBM as the unconventional natural gas resource.
 3. New offers in Reliance Jio: Mukesh Ambani’s pet project Reliance Jio has already become one of
the nation’s largest telecom networks. Reliance Jio needs to bring out new offers and a retention
policy to retain the customers who might as well drop Jio for another offer from other telecom giants.

4. Investing in attractive international oil and gas destinations: In 2015, RIL won the bid for
Myanmar Offshore block with 96% interest. RIL should continue making such investments to expand
its operations globally.

5. Acquisition: Reliance Industries can buy up startups or companies that are close to their products. For
instance, Reliance Industries recently acquired Justdial to integrate it with JioMart to increase its
presence in the retail sector.

The Threats of Reliance Industries Limited:

1. Intense competition in all sectors: RIL faces strong competition from various state-owned
companies in the Oil, Petroleum and Gas industries. IOC, HPCL and BPCL are state owned
companies which are its biggest competitors.

2. Climate Change: As of today Climate change is said to be one major calamity ever witnessed.
Reliance industries can be majorly affected due to their oil & petrochemical business where reliance
industries earn over 50% of their total revenue annually.

3. Competition: As of now, Airtel poses a major threat to Reliance Jio in the telecom sector, Adani
groups enter in petrochemical business may affect the reliance industries’ petrochemicals business in
the long term and Tata Groups is aggressively expanding its business like never before which can
majorly affect the reliance industries growth as Tata is a most reputed company in India.

4. Regulations: As governments enact stricter regulations and policies, this poses a major threat to their
growth.
● FINDINGS:

Reliance Industries is one of the few companies that have the most diversified businesses such as
petrochemicals, energy, retail, natural gas, media, and telecom. Reliance operates in over 125 countries
across the world. Telecom company Reliance Industries Reliance Jio has excellent 4G infrastructure
across the country and has given Reliance an edge over its competitors in data connectivity and also in
4G voice. RIL is one of the most profitable listed companies in India and Reliance Industries is among
the top 100 largest companies in the world 2020 in Fortune 500. The SWOT Analysis of Reliance
Industries includes its strengths, weaknesses, opportunities, and threats. And through this SWOT analysis
of Reliance Industries, we examined this beauty and wellness company in terms of its internal and
external factors.

● SUGGESTIONS/RECOMMENDATIONS:

The SWOT analysis of Reliance Industries highlights where the brand currently stands and the threats it
is facing in this era. Following the analysis this are the few suggestions for Reliance Industries:

1. Reliance Industries needs to concentrate more on the technology sector and make sure it brings a
major chunk of revenue.

2. Reliance industries must take steps to transition into green energy companies at a bullet speed rate
else they will lose the game.

3. Reliance Industries should stay away from unnecessary political activities which affect the company
for no reason.

● CONCLUSION:

Reliance industries have come up in such a highly competitive market like in India and also they were
able to establish their name in the international market also. From this report we can see that the company
is not just focusing on one industry whereas it has many subsidiaries and associates which help them to
be stable when the economy is down. In all its market sectors, Reliance Industries Limited enjoys global
leadership in its O2C business. With Jio being its fastest-growing business, it has all the proper marketing
campaigns and strategies in place. Reliance’s superior operational and financial performance reflects its
global competitiveness, prudent business strategies, and ability to maintain profitability through business
cycles.

● BIBLIOGRAPHY:

1. https://en.wikipedia.org
2. http://www.reliancepower.co.in
3. https://www.ril.com
4. https://www.thestrategywatch.com
5. https://businessmavericks.org