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The Company Behind Asia's Richest Man

The richest man in Asia, Mukesh Ambani, has been named to the ninth spot on the Bloomberg Billionaire Index. Ambani, the CEO of Reliance Industries Ltd. (NSE:RELIANCE), saw his net worth soar to $64.5 billion after gaining on recent investments.

Ambani is currently the only person from Asia to be featured on the list and edged out Larry Ellison of Oracle (NYSE:ORCL) and Francoise Bettencourt Meyers of L'Oreal (XPAR:OR) according to CNN.


Reliance Industries

Reliance Industries engages in hydrocarbon exploration and production, refining and marketing, petrochemicals, retail and communications. Located in west India, Reliance's refineries produce a range of petroleum products that find use as fuel variants, feedstock and fuel for power and cement plants. Fuels produced in refineries are exported to several countries and can be processed into any grade of gasoline or diesel. The refining and marketing business also includes thousands of petroleum retail outlets and a subsidiary that markets in several African countries.

The retail and communications arm of Reliance Industries, known by its Jio branding, has been Ambani's project since taking over as CEO. The company has developed itself over the last several years as a mobile carrier platform and is focused on developing a delivery network for grocery stores during the pandemic.

The surge in net worth that Amrani has seen recently is due largely to the fundraising and partnership development he has completed over the last several weeks. He signed a deal with Facebook (NASDAQ:FB), which is still awaiting regulatory approval according to CNN, valued at $5.7 billion. He has also brokered investments American companies and Saudi Arabian funds.

The partnership with Facebook will utilize existing WhatsApp technolgies to build a fully capable digital platform for India. Such technology will challenge the likes of global giants Google (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Alibaba (NYSE:BABA) and Tencent (TCEHY) for their existing customers.

As of June 22, the company was trading at 1,759.40 rupees per share, or about $23.21. The market cap was at 11.90 rupees ($156.98 billion). Between 2013 and 2019, the company saw its share price continually rise higher until being overvalued at the end of 2019 according to the Peter Lynch chart.

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GuruFocus gives the company a financial strength rating of 5 out of 10 and a profitability rank of 7 out of 10. Their operating and net margin percentages beat out over 68% of the oil and gas industry. The company has issued increased levels of debt over the last several years and the weighted average cost of capital outweights the return on invested capital.

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Disclaimer: Author owns no shares.

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This article first appeared on GuruFocus.