RIL share price gains as company announces O2C business spin-off into 100% subsidiary

Reliance Industries share price gained in the early trade on February 23 after the company said that it has initiated the process of carving out its Oil-to-Chemicals (O2C) business into an independent subsidiary. RIL said it will retain 100 per cent management control of the new subsidiary.

RIL said that the promoter group will continue to hold a 49.14 per cent stake in the O2C business.

RIL said that its existing O2C operating team will move to the newly-created subsidiary with the transfer of business, but there will be no dilution of earnings or any restriction on the cash flows.

The move is expected to facilitate value creation through strategic partnerships, including the deal with Saudi Aramco, and attracting dedicated pools of investor capital. The company said that talks with Aramco are still on. The world’s largest crude oil exporter Saudi Aramco is in the process of picking up a 20 per cent stake in RIL’s O2C business.

Following this reorganization, RIL’s stake in Reliance Retail Ventures will be 85.1 per cent and that in Jio Platforms will be 67.3 per cent. The proposed O2C subsidiary will include the fuel retail subsidiary in which RIL has a 51 per cent stake and the remaining 49 per cent belonging to BP plc.