New Delhi, Oct 22 (PTI) Reliance Industries Ltd will demerge its engineering, procurement and construction (EPC) business to create a focused entity catering to the group's EPC needs, the firm said in a statement.

The board of the company helmed by billionaire Mukesh Ambani on Friday "approved a scheme of arrangement under which the EPC and infrastructure undertaking of Reliance Projects and Property Management Services Ltd (RPPMSL), a wholly-owned subsidiary of RIL is proposed to be demerged into RIL," it said.

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This demerger, together with the existing EPC team in the company, creates a focused EPC undertaking in RIL to cater to the needs of the group.

Current EPC resources of RIL group are spread across different operating entities. RIL has some 4,000 engineers with proven expertise across engineering, procurement, project management and construction. RPPMSL also has a team of 20,000 professionals.

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Separately, the firm had on Friday announced that it will demerge its financial services business and list it on stock exchanges under the name Jio Financial Services (JFS).

RIL shareholders will get one share of JSF for one share held in Reliance.

On the EPC demerger, the firm said the focused EPC undertaking will aggregate and synergise engineering capabilities and expertise of the group.

Since this is the merger of a division of a wholly-owned subsidiary into the parent, no shares are being issued by RIL and no cash consideration is being paid under the scheme.

RIL had a turnover of Rs 445,375 crore in the fiscal year ending March 31, 2022 while the EPC and infrastructure undertaking of RPPMSL had a turnover of Rs 43,071 crore.

"The EPC undertaking will play a pivotal role in implementing RIL's large projects across oil-to-chemical (O2C), new energy and 5G roll-out," it said. "The implementation of these mega projects will require significant mobilization of global technology and EPC resources."

Reliance is in the midst of a massive spending drive, rolling out 5G or fifth-generation telecom services, building five giga factories to manufacture solar modules and hydrogen electrolysers, and expanding retail operations as well as traditional petchem business.

"Increasing infrastructure spend across geographies in oil and gas, chemicals, telecom and renewable energy sectors is expected to drive significant demand for EPC resources," the firm said.

The new EPC undertaking will facilitate internationalisation by setting up EPC Centres of Excellence at strategic offshore locations. It will align with existing subsidiaries of RIL in the US and Dubai. It will also incorporate new subsidiaries in Singapore and the UK.

These subsidiaries will enable faster mobilisation of high-quality talent and EPC resources in an increasingly constrained global EPC environment.

"The realigned EPC resources will further strengthen RIL's EPC delivery capabilities by tapping global resources and supply chains. It will also enhance productivity as working across time-zones will reduce costs and schedules while ensuring high quality output," the statement said.

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