Published on June 24, 2017

Reliance Industries Ltd (RIL) upstream business will drain cash from the rest of the business from fiscal 2018 until production begins from the three gas fields where RIL and BP announced fresh investments, says Moody’s investor service. Moody’s investor service in a note released on Tuesday said, “The annual investment amount is disproportionately higher than the cash flows being generated by RIL’s upstream segment, which reported an earnings before income and tax (Ebit) loss of Rs1,600 crore in fiscal 2017. This implies that the upstream business will drain cash from the rest of the business from fiscal 2018 until production begins from these blocks. This adds further drag on RIL’s refining and petrochemical businesses which are already supporting the company’s Rs3 trillion capex program over last four years in its energy and telecom businesses.”