Counting Rs 4 lakh crore loss in RIL? Dangote refinery listing in Nigeria could trigger a 30% rally

Reliance Industries' oil-to-chemicals business may be undervalued when compared with the valuation being assigned to Dangote Petroleum Refinery, according to YES Securities, which sees room for a re-rating of the Jamnagar refining and petrochemical complex.

The brokerage has maintained a buy rating on Reliance Industries with a target price of Rs 1,660, implying a potential upside of 30.6% from the current market price of Rs 1,271.

The argument is built around the upcoming listing of Dangote Petroleum Refinery in Nigeria, which is being valued at an implied enterprise value of about $42-48 billion. YES Securities said the valuation provides a global benchmark for modern mega-scale refining assets and highlights a valuation gap in Reliance’s oil-to-chemicals business.



Jamnagar cheaper despite higher complexity
Dangote's implied valuation values its refining capacity at around $69,230 per barrel per day, assuming an enterprise value of $45 billion. Reliance’s O2C segment, in comparison, is valued at about $39,286 per barrel per day, assuming an enterprise value of $55 billion.

That means Dangote is being valued at a more than 60% premium to Reliance on an operating-capacity basis.

The difference becomes sharper when refinery complexity is considered. Reliance’s Jamnagar complex has a Nelson Complexity Index of 21.1, compared with 11.5 for Dangote. On a complexity-adjusted basis, Reliance’s enterprise value is about $1,862 per unit of NCI, compared with about $6,020 for Dangote.

This means Reliance is being valued much cheaper despite having a larger, more complex and more deeply integrated refining and petrochemical platform.

YES Securities said this creates a valuation disconnect. It believes a re-rating of Reliance’s O2C segment towards 8-9 times EV/Ebitda is justified. Such a move could lift the O2C valuation by Rs 340-1,000 billion, or about Rs 25-75 per share.

Dangote gives global benchmark
DangoteRefinery is a large greenfield refining and petrochemical complex in the Lekki Free Zone in Nigeria. It has a nameplate capacity of 650,000 barrels per day and has demonstrated throughput of up to 700,000 barrels per day.

The refinery has an 11.5 Nelson Complexity Index and 830,000 tonnes per annum of polypropylene capacity. It benefits from its coastal location, access to the Lekki Deep Sea Port and proximity to the West African fuel market.

Dangote’s strength comes from being a new asset in an underserved market. It can benefit from domestic import substitution and regional exports, while improving utilisation may support operating leverage.

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YES said Dangote plans to expand refining capacity to around 1.4 million barrels per day by 2029 and raise polypropylene capacity to 2.4 million tonnes per annum by 2030.

Reliance has scale and integration
Reliance's Jamnagar complex is already a 1.4 million barrels per day integrated refining and petrochemical platform on India’s western coast. It includes the domestic tariff area refinery and the SEZ refinery.

The complex is the world’s largest single-site refining complex and has deep-conversion units such as FCC, coking, alkylation, catalytic reforming, ROGC and petcoke gasification. It is also integrated with Reliance’s broader O2C chain, producing fuels, polypropylene, paraxylene, PTA and other petrochemicals.

Reliance has also built large marine and logistics infrastructure, which allows flexible crude sourcing and efficient product exports.

The brokerage said Reliance has historically processed more than 216 crude grades, while Dangote had processed 36 crude grades by June 2026. Jamnagar’s scale, crude flexibility and petrochemical integration give it a wider earnings base than a standalone refinery.

YES Securities said Reliance’s O2C business is currently valued at 7.5 times FY28 EV/Ebitda in its sum-of-the-parts model. At this multiple, O2C contributes Rs 375 per share to the brokerage’s target price.

If the O2C multiple moves to 8 times, the valuation could rise by Rs 33800 crore, adding Rs 25 per share. At 8.5 times, the valuation uplift could be Rs 67,600 crore, or Rs 50 per share. At 9 times, the upside could be Rs 1.01 lakh crore, or Rs 75 per share.

The brokerage said Dangote’s 8.5-9 times EV/Ebitda multiple cannot be copied directly for Reliance because Dangote enjoys Nigerian monopoly premiums, while Reliance has a conglomerate structure. But it said a re-rating above 7.5 times is justified because of Jamnagar’s replacement cost and complexity advantages.

YES also pointed to the 2019 Saudi Aramco transaction, where a proposed 20% stake purchase in Reliance’s O2C business for $15 billion had implied an enterprise value of $75 billion and about 10.2 times EV/Ebitda. YES Securities’ current O2C enterprise value for Reliance is about $55 billion.

SOTP supports upside

YES Securities values Reliance’s total business at Rs 22.46 lakh crore, or Rs 1,660 per share. Its sum-of-the-parts valuation assigns Rs 375 per share to O2C, Rs 76 to domestic exploration and production, Rs 764 to the retail venture business, Rs 450 to Jio Platforms and Rs 67 to new energy.

The brokerage expects Reliance’s revenue to rise from Rs 10.75 lakh crore in FY26 to Rs 14 lakh crore in FY27, before staying nearly flat at Rs 13.97 lakh crore in FY28. Ebitda is expected to rise from Rs 1.78 lakh crore in FY26 to Rs 2.15 lakh crore in FY28.

Reliance shares have fallen 19% this year, wiping out over Rs 4 lakh crore of investor wealth.

Disclosure: This article has been written by Podishetti Akash, who is not a SEBI-registered Research Analyst or an Investment Adviser. Podishetti Akash and her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclourses here