India's Reliance Industries raised on Wednesday its estimate of gas reserves -- already one of the country's largest recent finds -- by nearly 40 per cent, and unveiled ambitious investment plans for oil to telecoms.

India's second most valuable company raised its estimate of gas reserves in its deep-sea field off the country's southeast coast to 14.5 trillion cubic feet from 10.5 trillion cubic feet.

It also said it planned to invest Rs 70 billion ($1.48 billion) in the current year to March 2004 in oil exploration, petroleum refining and distribution, petrochemicals and telecoms.

Reliance, the country's largest private-sector company, plans to use the strong cash flows generated by its petrochemicals operations to fund its massive telecoms project and increase vertical integration in its oil and gas business.

"Reliance is a convergent play between the manufacturing and services businesses," said Anil Ambani, vice chairman and managing director, adding that the company's cash flows and low gearing allowed it to step up capital expenditure.

The company plans to maintain annual capital expenditure at about Rs 50 to 60 billion, much higher than the R 37.08 billion it spent in the year to March 2003.

Ambani told a news conference after Reliance reported its earnings for the fourth quarter that the company had used half of its annual cash flow on capital expenditure.

He said the company had also used some of its cash to prepay its debt, which had helped pare its interest costs.

The company earned a cash profit of Rs 75.65 billion last year. It posted a net profit of Rs 41.04 billion on net sales of Rs 458.9 billion in the year to March 2003.

Reliance Industries plans to invest Rs 30 billion this year to set up 1,500 petrol pumps to break into a sector dominated by state-run giants. Of this amount, Rs 10 billion will come from cash generated by the company.

Analysts said this expansion is critical to the company's oil business because its marketing agreement with the state-owned refiners expires in March 2004.

Moreover, there are concerns about the government's ability to privatise Hindustan Petroleum Corporation by October as planned. Reliance is one of the contenders for a controlling 34 per cent stake in the company.

The state giant's network of 4,600 gas stations offers investors a foothold in India's $15 billion retail market.

Reliance said it would spend Rs 15 billion this year on its telecoms business as part of its total capital outlay of Rs 180 billion, half of which has already been invested.

Reliance Infocomm, its 45 per cent telecom arm, has initially put in place a 60,000 km (37,500 mile) high-speed fibre-optic network linking 673 towns and cities in the country.

In two years, it will expand this to a 116,000-km network linking 640,000 villages and 2,500 towns and cities.

The company launched its services in December, but will begin charging customers from May 1.