Mukesh Ambani takes a hit from Low Oil Demand
Business tycoon Mukesh Ambani had to bear one of his worst stints in business as the sinking price of oil wiped his assets by $73 billion with him losing as much as $5 billion recently.
Stocks could see the hit with them falling by 6.8%, making it the worst slip since May 2020. Considered as Asia’s richest, the conglomerate owner reported a 15% decline in quarterly profit to 95.7 billion rupees ($1.3 billion) late on Friday, as the coronavirus pandemic hit fuel demand. Revenue fell 24% to 1.16 trillion rupees.
Fuel demand has been dwindling in the light of the pandemic since lockdowns started in November last year. Many Middle Eastern countries were severely hit, as oil has been their primary source of exports.
This has strengthen Ambani’s belief in the much needed business shift from oil, petroleum led investments into IT, and technology led endeavors. Amidst lowering use of public and private transport for commute, the oil consumption of customers has been meagre.
While oil demand has been weakened, Reliance Jio Infocomm Ltd.,has shown triple growth since lockdown periods.
While the pandemic is not something anyone in the business world had anticipated, Mukesh Ambani had his eyes set on a shift from energy sector to the technological sector half a decade ago. With purchase of some of Kishore Biyani Future Group, he might also be looking at adding some more weight to the retail arm of the Reliance business portfolio.
Amidst the world shifting to digitized way of living, RIL also has plans to leverage the users’ digital footprint and earn incremental revenues from digital ads, digital lending and even engagements like play along with IPL, KBC etc, an official source has confirmed to the media.