RIL AGM spelt out the next phase of growth for the large conglomerate. Reliance Industries under the leadership of Mukesh Ambani is metamorphosing into a new age company by committing $10 billion into developing renewable energy as a business vertical.
Mukesh Ambani, the Chairman and Managing Director, laid down the vision for the conglomerate by a big thrust on the green energy space and said that Jamnagar, cradle of legacy energy, will transform into the cradle of new energy business.
Experts cheered the move. For instance, Dinesh Kanabar of Dhruva Advisors said, “It’s very important to point that organisations which do not keep evolving perish. Here is an energy company, which went from energy to retail to telecom, and is now getting back into energy, but in a new form. And if I look at global examples, whether it is Shell, Exxon Mobil, BP, I don’t think any energy player of the size and scale of Reliance has made such a big announcement.”
RIL’s green energy entry will not only make India meet its goals in renewable power but also propel the sector and create an ecosystem. Highlighting this aspect, Ajay Mathur of International Solar Alliance said, “This is a game changer…Reliance is reinventing itself. This 100 gigawatt of solar energy will completely change the way Reliance itself is built, it will provide the ecosystem, the value chains, and competition that is needed to change India.”
Reliance embarked on a massive fund raising exercise in the middle of the pandemic. As regards this, well-known Investor, Manish Chokhani said, “Reliance is playing at world scale with the world players at the beginning of a long cycle which is coming ahead. Secondly, in the context of its balance sheet. I think with this $40 -$45 billion equity infusion which has happened over the last year, the Reliance net-worth already would be of the magnitude of $100 billion and they’re currently net debt-free.
So, there is at least $50 billion of debt capacity, $15- $20 billion of cash flow is what they now generate every year, which is going to probably compound at 25-30% for the next three- four years, as the Chairman said. Hence, what you’re seeing is the scale, and no one is doubting that Reliance will pull this off.”
Dinesh Kanabar also pointed out some of the important announcements and said, “from an international perspective we have seen a nominee of an independent director who is a chairman of Aramco, on the board of Reliance, which in some way is internationalisation. Then there are talks about taking 5G overseas, generation of employment, etc. I think these are very critical announcements, which came in today.”