MUMBAI : Reliance Industries Ltd (RIL) has surpassed its strategic partner British oil major BP Plc in terms of market capitalization. The rise in market value of the Indian company was, however, driven by its retail and telecom businesses.

RIL hit a market cap of $132.24 billion on Wednesday compared with BP’s $130.51 billion. At closing, shares of RIL traded at ₹1,478.70 on BSE, up 0.8% from its previous close. So far this year, it has gained 31.9%. The story has used a dollar-rupee conversion rate of ₹70.89 per dollar.

At 10.30 am (GMT), BP was trading $6.42 in London trade, up 1.3% from its previous close. On Tuesday, shares of BP, closed at $6.33, down 3.8%, the most in four weeks, after dashing investor hopes of a higher dividend this year. Year to date, the BP stock has risen 0.4%.

RIL’s refining and marketing segment contributes 51.15% of the company’s revenue, while its petrochemicals unit bring in 22.34%. Organised retail’s share in the revenue pie is at 17%, while that of the digital business is 6%, and exploration and production at 0.65% as on 31 March.

View Full Image Graph: Ravindra Sonavane

BP reported adjusted net income of $2.25 billion for the September quarter, exceeding the average analyst estimate of $1.77 billion. This compares with a profit of $3.84 billion a year earlier, when BP decided to buy a $10.5 billion package of US shale assets in cash, rather than in shares, because it was confident of oil prices staying high.

Globally, in the listed universe, Exxon Mobil Corp. is the biggest oil and gas firm, with a market cap of $289.58 billion, followed by Royal Dutch Shell Plc. at $238.74 billion, Chevron Corp. at $224.26 billion, Petrochina Co. Ltd with $149.19 billion in market cap, and Total SA at $141.34 billion.

However, the world’s largest energy entity is Saudi Aramco, which pumps out about 10% of the world’s crude, and had emerged as the most profitable company in 2018. Saudi Aramco beat Exxon Mobil Corp. in terms of earnings. The energy giant plans to launch its initial public offering in November.

BP is RIL’s partner in its exploration and production ventures in India. Both companies also operate an equal joint venture, India Gas Solutions, and are forming a joint venture to set up fuel retail outlets in India, wherein RIL will have a 51% stake, while 49% will be held by BP. The joint venture will also look into innovative models such as mobile fuelling units and home delivery, in addition to providing electric charging facilities in some of their outlets.

On the exploration and production front, both companies are investing $5 billion in the KG deep-sea project, which is set to begin production from May 2020.

RIL, which has embarked on a deleveraging exercise after being on a spending spree over the last five years, is in the process of creating three verticals—oil-to-chemicals with Saudi Aramco as the proposed strategic partner, a digital/technology platform with a wholly-owned subsidiary (announced last week), and a retail business, which will trigger value creation.

“RIL is in the process of inducting strategic partners into each business vertical, potentially triggering value recognition. During a spin-off of different verticals in 2005–06, RIL had triggered a value appreciation in excess of 35%," said Edelweiss Securities Ltd in its report dated 29 October.

ravindra.s@livemint.com

Bloomberg contributed to this story.

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