A scheme to spin off Reliance's energy, telecoms and financial interests will become effective later this month, leaving the firm with oil, gas and petrochemicals.
Analysts say that higher volume growth in the petrochemicals business, along with revenues from its oil and gas, will help Reliance to make up for the hived off businesses.
Reliance is setting up a 280,000-tonne-a-year polypropelene plant at its refinery that will increase its capacity to 1.43 million tonnes of the product a year by March 2006.
The company will also spend $5.8 billion to double capacity of its refinery and another $4.1 billion will be invested in oil and gas exploration over four to five years.
The restructuring of businesses follow a settlement between the two Ambani brothers at the helm of the Reliance group. Younger brother Anil will control utility Reliance Energy Ltd., financial services firm Reliance Capital Ltd., and the unlisted telecoms businesses.
Mukesh Ambani will run the flagship business, which includes oil and gas exploration, refining and petrochemicals, as well as Indian Petrochemicals Corp Ltd.
Reliance has set Jan. 25 as the record date for its shareholders to be eligible for shares in the separated entities. Shareholders will receive one share each in four new companies representing Reliance's interests in those businesses for every one share held. ($1 = 44.3 Indian rupees)
RIL's activities span exploration and production (E&P) of oil and gas, refining and marketing, petrochemicals (polyester, polymers, and intermediates), textiles, financial services and insurance, power, telecom and infocom initiatives.
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