Mumbai: Billionaire Mukesh Ambani, Asia’s most affluent, will address the shareholders at the 44th Annual General Meeting (AGM) of Reliance Industries Limited (RIL), India’s most valued firm by market capitalization, on Thursday virtually.
Ambani, known for making big bang announcements during the AGM, is expected to cheer the shareholders with mega announcements in its core O2C business and the consumer-facing retail and telecom businesses.
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The market expects the 64-year old business tycoon to clarify the long impending 15 billion deal with the world’s largest oil firm Saudi Aramco to sell a 20% stake in the newly carved out oil-to-chemicals (O2C) business of RIL.
Last year, Ambani, during the AGM, said, “Last year, I shared with you the basis of equity investment by Saudi Aramco in our O2C business. Due to unforeseen circumstances in the energy market and the Covid-19 situation, the deal has not progressed as per the original timeline. We expect to complete this process by early 2021.”
Saudi Aramco chairman and Governor of the Kingdom’s wealth fund Public Investment Fund, Yasir Al-Rumayyan, may be inducted on the board of Reliance Industries Ltd, a precursor to a $15 billion deal. However, the deal signed in 2019 is yet to fructify.
RIL had raised Rs 2.6 lakh crore ($36 billion) by selling stakes in its retail and digital assets, turning net debt-free, and now the investors are looking at RIL chief to chart a strategic road map for initiatives such as e-commerce to 5G rollout in the upcoming AGM.
Reliance may launch its first 5G phone in association with Google and JioBook, a low-cost affordable laptop from Reliance Jio.
However, Mr. Ambani’s plan to conquer the Indian market with a locally assembled Google-powered smartphone is facing headwinds, with supply-chain disruptions and rising component prices suppressing production volumes, Bloomberg reported quoting people familiar with the matter last week.
Analysts believe that the phone’s pricing would be critical to converting the feature phone subscribers to Jio 4G subscribers.
Last year, Ambani spoke about the 5G deployment in the country.
“That JIO has designed and developed a complete 5G solution from scratch. This will enable us to launch a world-class 5G service in India… using 100% homegrown technologies and solutions. This Made-in-India 5G solution will be ready for trials as soon as the 5G spectrum is available… and can be ready for field deployment next year. And because of JIO’s converged, all-IP network architecture… we can easily upgrade our 4G network to 5G. Once Jio’s 5G solution is proven at India-scale, Jio Platforms would be well-positioned to be an exporter of 5G solutions to other telecom operators globally, as a complete managed service,” Ambani said during last year’s AGM.
The investors will be keenly watching Ambani’s plan for 5G.
On the retail front, investors will look for clarity on the operations of JioMart, which now has a presence in 200 cities, along with AJIO—its fashion and lifestyle platform.
According to global brokerage and research firm Goldman Sachs, retail could be the next engine of growth for RIL as it believes that the retail EBITDA could grow 10x over the next 10 years.
RIL’s AGM has historically been a keenly watched event (previously attended by 3,000 shareholders when held in physical format and last year saw 300,000 concurrent viewers of the virtual AGM across 42 countries and 468 cities)