The annual shareholder meetings of Reliance Industries are much to look forward too, with the company's chairman and MD Mukesh Ambani using the occasion to make big ticket announcements be it the launch of Jio 4G telecom service back in 2016 to the launch of Jio GigaFiber in 2019, new renewable energy ambitions in 2020 or detailing a formal succession plan last year.
At this year's AGM, which will be held on Monday, August 28, shareholders as well as market analysts will be keenly looking forward to what's next on the billionaire Ambani's agenda across the various businesses. One area they will want to hear more on the company's ambitions in the financial services business.
RIL recently demerged Jio Financial Services and listed it separately. Financial services is the newest business of the oil to telecom conglomerate, but the company has big plans to become a large non-banking finance company with interests from payments to insurance, asset management and loans.
The company took its first steps in that journey in July, when it announced plans for an equal share joint venture with US-based investment manager BlackRock to enter the asset management space in July.
"Today's India is young and entrepreneurial, adopting digital finance at an unprecedented pace. The digital revolution has penetrated every corner of the nation through Jandhan accounts, digital payments, usage of smartphones and low cost data. The growth opportunities presented by financial services are remarkable and provide a strong directional support to the economy," Ambani said in the letter to shareholders in this year's annual report.
He said that Jio Financial Services with its subsidiaries will leverage the technological capabilities of Reliance and deliver financial services, aiming to provide simple, affordable and innovative digital first solutions.
Talking of technological capabilities, Jio announced earlier this month that it has achieved 5G rollout obligations in all circles. In the AGM last year, it announced a 5G hotspot device called AirFiber, which would deliver high speed wireless 5G data to homes and offices. But, its yet to be launched in the market. The company could well use the AGM stage to launch the device. After all, we have seen Jio Phones and Jio GigaFiber launched in previous AGMs.
The company has also recently introduced the Jio Bharat 4G feature phone, targeting the close to 250 million people who are still using basic 2G feature phones. The company also recently launched the JioBook laptop. RIL could announce more plans and updates on both these fronts.
Launch of affordable 5G smartphone along with attractive 5G tariff plans, are among key expectations, said Dayanand Mittal research analyst at JM Financial Institutional Securities.
Over the last couple of years, RIL has also charted out ambitious plans to transform its energy business from petroleum to renewable energy, with a strong focus on green hydrogen and solar. In 2021, it had announced plans to invest Rs 75,000 crore over three years to build the new energy business. According to RIL, the company is now ready to double its investments here.
"The investment of Rs 75,000 crore with a readiness to double investment will further the company’s goals related to energy transition, enhance renewable energy usage and operational eco-efficiency, and broaden focused research for the new energy business," the company said in the annual report.
Probal Sen, research analyst at ICICI Securities, noted that multiple investments in the various new energy segments are starting to play out gradually, with the others segment (housing new energy and other small segments) having grown in revenue by 10 times over financial years 2018-2023, even as profitability from this segment remains some time away.
"The upcoming AGM of RIL should provide some more meaningful update on the pace and direction of investments in this segment over the next few years," said Sen.
Just like new energy, RIL has charted ambitious plans in fast moving consumer goods. In the AGM in 2022, Isha Ambani had announced the company would enter FMCG business aiming to deliver high-quality products at affordable prices. Since the announcement, the company has launched its own FMCG brand called Independence, which is slowly being expanded across geographies. At the same time, it has made several acquisitions in this space to scale up rapidly. Investors would be keen to hear on the progress of the FMCG business and how it plans to grow that over the next year.
Reliance's retail business, be it its own physical stores or the JioMart platform through which it connects neighbourhood grocery stores, will be key to the expansion and success of the FMCG business.
Reliance Retail has 18,040 outlets, with over 3,300 stores opening in the last financial year, making it the largest retailer in the country by a wide margin. It also entered into the beauty business with the launch of brand Tira this year. Separately, over 3 million merchants have partnered on its new commerce platform.
Reliance Retail Ventures had raised Rs 47,265 crore from a clutch of global investors back in 2020. With the intent to scale up the business further, the company may have begun a fresh round of fund raising. On Wednesday, it announced that Qatar Investment Authority would invest Rs 8,278 crore into Reliance Retail Ventures.
In the backdrop of this fresh fund raising, investors would be keen to know the updated roadmap for this business. In the past, Ambani had said that the retail business would be separately listed on the stock markets at some point.
With RIL demerging and listing the financial services business, whether Ambani updates shareholders on any IPO plans for retail or digital businesses in the AGM needs to be seen.
Any potential strategic stake sale in the O2C (oil to chemicals) business and update on progress of various projects in the clean energy business is also among key expectations, according to JM Financial's Mittal.
Reliance AGMs once used to be grand affairs, with founder Dhirubhai Ambani taking the podium at the centre of a large stadium. Over the years, the AGM moved to a closed auditorium in south Mumbai and since the pandemic, the company has been holding AGMs virtually. This year's AGM will also be virtual, but just like the past, it will be packed with information and updates, which millions of its passionate shareholders will view and cheer on.
