India’s Reliance Industries recently became the world’s second largest energy company by market capitalisation, overtaking US oil major ExxonMobil.
Towards the end of July, Reliance’s market capitalisation hit 14.1 million Indian rupees – about £147 billion – compared with that of ExxonMobil, which is around £145 billion. Reliance is now second only to the Saudi oil giant Aramco, which is not just the biggest oil company in the world by market cap, but the biggest company of any sort, although Apple recently came near to overtaking it.
It should be considered, however, that ExxonMobil is far more specialised in upstream and downstream oil operations, producing oil around the world, refining oil into fuel and base materials, and making end products such as the Mobil DTE range of hydraulic oil. Reliance, meanwhile, has a much more diverse set of operations beyond petroleum that includes film and television, telecommunications, textiles, and retail.
Reliance has added about £30 billion to its value over the last month or so, mostly due to its retail and technological assets, especially with Google planning to buy a substantial stake in its Jio Platforms subsidiary and Amazon being rumoured to follow suit.
While energy accounted for 80% of Reliance’s revenue in the year ending March 31, the plan of Mukesh Ambani, the company’s chairman, to expand its retail and digital operations appears to have borne fruit at a time when many oil majors are seeing falling share prices, so this might present an interesting business model for oil companies to consider.