Indian tycoon's wealth grows as oil prices plunge

Mr Ambani's net worth grew by US$620 million (S$891 million) as of Friday, the most in the world this year.
Mr Ambani's net worth grew by US$620 million (S$891 million) as of Friday, the most in the world this year.

NEW DELHI • Oil's plunge and the impact on the global economy is hurting many a billionaire. Indian tycoon Mukesh Ambani is not one of them. Reliance Industries, controlled by Mr Ambani, is benefiting from low crude prices as margins swell at the company's refining complex, the world's largest.

Mr Ambani's net worth increased US$620 million (S$891 million) as of Friday, the most in the world this year, according to the Bloomberg Billionaires Index. That is almost five times more than the second-biggest gainer this year, Wal-Mart heiress Alice Walton, who is up US$130 million.

Among India's 13 billionaires in the world's richest 400, Mr Ambani is also the only one to see an increase in his fortune.

Profit for the December quarter, which was set to be announced later yesterday, is projected to rise to an eight-year high to 69.8 billion rupees (S$1.48 billion), from 50.9 billion rupees a year earlier, according to the median estimate of 16 analysts in a Bloomberg survey.

Higher refining margins will underpin the performance as oil prices during the quarter were 42 per cent lower on average from the same period a year earlier.

That has attracted investors, including BlackRock, to Reliance, making the Mumbai-based company the best performer on the Bloomberg World Oil & Gas Index over the past three months.

"Any increase in refining margin helps Reliance's profit significantly because that business is the largest contributor to the bottom line," said Mr Sanjeev Panda, Mumbai- based analyst at Sharekhan. The shares have gained "because of the sharp fall in crude reflecting positively on the margins".

Brent oil has fallen more than 70 per cent the last 18 months as the Organisation of Petroleum Exporting Countries effectively abandoned output limits amid a surplus.

The global benchmark crude yesterday added 54 US cents, or 1.9 per cent, to US$29.09 a barrel on the London-based ICE Futures Europe exchange at 2.31pm Singapore time.

Reliance's shares climbed about 14 per cent last year, ending a seven-year jinx of under-performing the S&P BSE Sensex.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on January 20, 2016, with the headline 'Indian tycoon's wealth grows as oil prices plunge'. Print Edition | Subscribe