Oil’s plunge and the impact on the global economy is hurting many a billionaire. Indian tycoon Mukesh Ambani isn’t one of them. Reliance Industries, controlled by Ambani, is benefiting from low crude prices as margins swell at the company’s refining complex, the world’s largest.
Ambani’s net worth increased $620mn 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’s up $130mn.  Among India’s 13 billionaires in the world’s richest 400, Ambani is also the only one to see an increase in his fortune. Profit for the December quarter jumped 42% from a year earlier to Rs72.2bn ($1.07bn), beating the Rs70.1bn mean of 17 analyst estimates in a Bloomberg survey. Higher refining margins underpinned the performance as oil prices during the quarter were 42% lower on average from the year-earlier period.
Reliance earned $11.50 for every barrel of crude it turned into fuels, compared with $7.30 a year and $10.60 in the three months ended September, the company said after the close of market hours yesterday. Investors including BlackRock have bought Reliance shares, 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 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% the last 18 months as the Organisation of Petroleum Exporting Countries effectively abandoned output limits amid a surplus. The global benchmark crude yesterday jumped 5.5%, the most since September, to $30.1 on the London-based ICE Futures Europe exchange at 5:28 pm Mumbai time.
Reliance’s shares climbed about 14% in 2015, ending a seven-year jinx of under-performing the S&P BSE Sensex. The stock slid 37% from 2008 through 2014, versus a 35% advance in India’s benchmark equity gauge, as the company spent billions of dollars to expand its chemicals capacity and plowed $15bn in a telecommunications venture. The shares climbed 2.6% to Rs1,043.6 yesterday.
Reliance Jio Infocomm, Ambani’s telecom unit, plans to sell Rs150bn of shares to existing stockholders, according to an exchange filing late Monday. “Start of projects worth $30bn across segments will make 2016 the biggest year in Reliance’s history,” Vikash Kumar Jain, an analyst at CLSA, wrote in a January 4 note.