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Reliance Industries Ltd (RIL) has added 499 units and affiliates in just over four years as the refiner and chemicals maker expanded into new businesses, including telecom and renewable energy.

India’s most valuable company had 88 Indian and 47 foreign units in 2016-17. That increased to 296 Indian and 53 foreign subsidiaries in 2020-21, according to RIL’s latest annual report.

The number of joint venture companies, both Indian and foreign, have more than doubled from 24 in 2016-17 to 52 in 2020-21, and affiliate companies increased nearly fivefold from 20 in 2016-17 to 98 in 2020-21. These subsidiaries are spread across RIL’s businesses in petrochemicals, retail, telecom, digital services, real estate, exploration and production, textiles and media.

Spreading wings
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Spreading wings

“Over the past few years, RIL has been acquiring both small and big startups. For each such transaction, the company creates a new subsidiary. Also, there is a lot of investment that is happening into smaller companies or joint ventures or associate companies via subsidiaries," said an analyst tracking RIL at a local brokerage.

An RIL spokesperson did not reply to an email sent on Tuesday.

Since 2016-17, RIL made $3.3 billion in acquisitions with 14% in retail, 80% in telecom, media and technology, and 6% in energy. Its latest acquisition was Stoke Park Ltd, a luxury property in the UK, for £57million.

The company has made more than 30 acquisitions in the past three years in the startup space alone. A majority of the acquisitions were done to add value or fill gaps in RIL’s consumer offerings. These investments fall under the five categories of telecom, retail, education, healthcare and agriculture.

Analysts said that with its new business segments, including digital commerce, telecom and now renewables, RIL is actively looking to acquire more startups and mature companies. These acquisitions lead to the formation of new units and are sometimes consolidated into a holding company.

In October, RIL carved out its oil-to-chemicals business as a precursor to a stake sale to Saudi Aramco. In February last year, it consolidated its media businesses under Network18. In 2019, the company created Jio Platforms for its digital businesses.

“Conglomerates like RIL have a wide corporate holding structure with multiple subsidiaries. However, subsidiaries are also created to mitigate and segregate risks, save taxes and channel funding or resources for specific projects," said another Mumbai-based equity analyst.

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