Reliance Industries Ltd has made a foray into the new materials business by acquiring the assets of a Gujarat-based loan defaulter Kemrock Industries and Exports Ltd.
Reliance Industries Ltd has made a foray into the new materials business by acquiring the assets of a Gujarat-based loan defaulter Kemrock Industries and Exports Ltd, it said on Wednesday. “Reliance Industries Ltd participated in an online e-bidding process held recently by Allahabad Bank being leader of the consortium of 11 Banks to sell / dispose off assets of “Kemrock Industries & Exports Limited” of Vadodara (Gujarat) and has been declared as the winner in the said bid,” the Mukesh Ambani-controlled diversified conglomerate said in a statement today.
The move fructifies Reliance Industries’ efforts to enter the composites business and establish a leadership position in this large and growing market in India, it said. Composites are used in a variety of applications and industries such as renewable energy, mass transportation, infrastructure and a host of other industrial products.
Kemrock Industries, whose shares have been suspended since at least March of this year, has a market capitalisation of Rs 17.75 crore. However, notwithstanding its financial troubles, Kemrock Industries and Exports Ltd is usually counted among the leading players in the carbon fibre wraps market with presence in regions including North America, the United States and Europe.
Reliance Industries said that the acquisition of Kemrock Industries’ assets will pave the way for it to foray into new materials (composites and carbon fibre) and further strengthen its petrochemicals business portfolio. RIL is in the process of complying with the necessary formalities for acquisition of assets, it said.
Earlier May, the government notified an ordinance for speedy resolutions of NPAs in efforts to deal with the problem of India’s chronic bad loans, which have surged to to Rs 9.63 lakh crore. According to the RBI, top 12 bad loan accounts make up for Rs 2.5 lakh crore of bad debts, or 25% of the total. The ordinance gave powers to the RBI to direct banks to initiate bankruptcy proceedings against bad debt accounts under the Insolvency and Bankruptcy Code 2016 (IBC).
Kemrock Industries is one of the loan defaulters which has been pushed into bankruptcy by its lead banker Allahabad Bank for failing to repay as much as Rs 444 crore in loans. Reliance Industries shares are on an upswing for the last one week, rising by as much as 5.14%. RIL shares today ended at Rs 1,644.6 on BSE, up 0.7% from the previous close.