Reliance topples Exxon to become the world’s second-biggest energy firm

Shares in Indian conglomerate gain 4.3% in Mumbai on Friday, adding $8bn to take its market value to $189bn

Mukesh Ambani's oil-to-telecoms conglomerate Reliance Industries has become the wold's second-largest energy company. AFP.

Reliance Industries, controlled by Asia’s richest man, toppled ExxonMobil to become the world’s largest energy company after state-controlled Saudi Aramco, as investors piled into the conglomerate lured by the Indian firm’s digital and retail forays.

Reliance, which manages the world's biggest refinery complex, gained 4.3 per cent in Mumbai on Friday adding $8 billion (Dh29.36bn) to take its market value to $189bn, while Exxon Mobil erased about $1bn.

Reliance’s shares have jumped 43 per cent this year compared with a 39 per cent drop in Exxon’s shares as refiners across the globe struggled with a plunge in fuel demand. Aramco, with a market capitalisation of $1.76 trillion, is the world’s biggest energy company.

While the energy business accounted for about 80 per cent of Reliance’s revenue in the year ended March 31, chairman Mukesh Ambani’s plan to expand the company’s digital and retail arms has helped him attract $20bn into its Jio Platforms unit. That in turn helped add $22.3bn to Mr Ambani’s wealth this year, propelling him to the fifth spot in the Bloomberg Billionaires Index.

Mr Ambani’s dealmaking has lured investments from Google to Facebook into his digital platform in recent months. The 63 year-old tycoon has identified technology and retail as future growth areas in a pivot away from the energy businesses he inherited from his father, who died in 2002.

Meanwhile, large scale global oil demand destruction — some 30 million barrels a day, or a third of regular usage, in April — sent energy markets into a second-quarter tailspin, from which they’ve only recently started to recover. A major decline in oil prices combined with Opec production cuts, collapsing refining margins and millions of barrels of unsold crude have hurt big oil companies including Exxon and Chevron.