Indian billionaire Mukesh Ambani's wealth grew most in the world as oil prices plunged

Mr Mukesh Ambani, chairman of Reliance Industries.
Mr Mukesh Ambani, chairman of Reliance Industries.PHOTO: BLOOMBERG

NEW DELHI (BLOOMBERG) - Oil's plunge and the impact on the global economy is hurting many a billionaire. But Indian tycoon Mukesh Ambani isn't 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$889.8 million) as of Friday, the most in the world in 2016, according to the Bloomberg Billionaires Index. That's 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, to be announced later on Tuesday (Jan 19), 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 year-earlier period.

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 on Tuesday 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 in 2015, ending a seven-year jinx of under-performing the S&P BSE Sensex. The stock slid 37 per cent from 2008 to 2014, versus a 35 per cent advance in India's benchmark equity gauge, as the company spent billions of dollars to expand its chemicals capacity and plowed US$15 billion in a telecommunications venture.

Reliance Jio Infocomm, Ambani's telecom unit, plans to sell 150 billion rupees of shares to existing stockholders, according to an exchange filing late on Monday.

"Start of projects worth US$30 billion across segments will make 2016 the biggest year in Reliance's history," Mr Vikash Kumar Jain, an analyst at CLSA, wrote in a Jan 4 note.