Reliance AGM 2022: Succession plan, 5G deployment announcements expected today | Techno Glob


Mukesh Ambani’s annual speech to investors has evolved over time into a much-anticipated statement about his $222 billion empire, akin to Warren Buffett’s annual letters to Berkshire Hathaway shareholders.

This year, investors in Reliance Industries Ltd. will seek information Monday on the company’s 5G rollout, how it plans to unlock value from its telecom and retail units through separate listings, and when and how its children will resume the reins.

READ ALSO : Reliance Jio’s 5G service may launch in 13 cities by that date. Is your city in this list?

Anticipation is high as the 65-year-old billionaire, who has made Reliance India’s biggest company by market value and a powerful conglomerate, used the speech for a series of big announcements. These include the launch of its disruptive telecommunications service in 2016, Saudi Arabian Oil Co.’s proposed investment in Reliance’s energy business in 2019, and a strategic shift to green energy in the year last.

This year’s shareholders’ meeting comes as the retail refining group faces the twin challenges of a global recession and the meteoric rise of Gautam Adani, who eclipsed Ambani as the world’s richest man. Asia earlier this year and is emerging as an alternative power center on the corporate landscape.

Reliance investors will be mindful of how the Adani conglomerate split its business into different listings years ago, unlocking value, and will expect “clarity and specific timelines for next big things” from Ambani’s more centralized holdings, Kranthi Bathini, equity strategist at WealthMills Securities Pvt Ltd. in Mumbai. Adani’s wealth has jumped $58 billion this year on the back of rising stocks, compared to $3.3 billion for Ambani’s.

Here’s where investors are waiting for news:

Succession

The patriarch signaled that succession planning at the top of Reliance will be accelerated at last year’s shareholder meeting and reiterated this explicitly in December. His three children, his daughter Isha and his sons Akash and Anant, already hold various directorships in unlisted companies in the group and are gaining visibility in their leadership.

Ambani has stepped down as Chairman of Reliance Jio Infocomm Ltd. in June, giving way to his eldest son, Akash, who took the helm of India’s largest wireless operator. As rumors continue to swirl around Ambani’s health, investors will be looking for more concrete steps to take in the leadership transition, with Isha, Anant and possibly his wife, Nita, taking on more responsibility.

5G deployment

Reliance Jio Infocomm has bought airwaves worth more than $11 billion in a local spectrum auction as it seeks to cement its advantage over smaller rivals – Bharti Airtel Ltd. and Vodafone Idea Ltd. – in the deployment of faster 5G networks. This will be key to increasing revenue and attracting high value users.

Investors will be looking for proof of the pudding here. The technology has yet to bring benefits to Asian wireless operations despite investing billions of dollars, even for those in China that have offered 5G service since 2019. Details like a national rollout date, pricing plans for 5G services as well as the demand for the service will be crucial for Reliance Jio to reveal.
Ambani children can demonstrate some of the key features of 5G services at the meeting, just as they have showcased new telecom products in the past.

READ ALSO : Big announcement from Ashwini Vaishnaw on the launch of 5G services in India

Spin-offs, IPOs

The street has been waiting for more clarity on Reliance Jio and Reliance Retail Ltd.’s initial public offerings, especially after the two consumer companies raised $27 billion from high-profile global investors in 2020.

Both companies are market leaders in their respective sectors with a formidable lead over their rivals. Their rosters — or even their spinoffs — could propel Ambani’s net worth. “Timeliness is critical to recouping the mojo from Reliance’s stock,” Bathini said. Confidence has gained about 11% this year compared to the more than 40% rise in the best performers of the S&P BSE Sensex.

New energy, old energy

The $76 billion green energy pivot is the biggest transformation Ambani is currently leading. It’s also a tough transition given the conglomerate’s roots in petrochemicals and crude oil refining and the continued outsized contribution of fossil fuel-focused businesses to Reliance’s annual revenue.

Ambani says green push outperforms other Reliance ventures

Investors will be looking for updates on plans announced last year to build four gigafactories to manufacture solar modules, hydrogen electrolyzers, fuel cells and storage batteries. Ambani has also been on the verge of acquiring small green energy companies around the world for their expertise and technology. It is also expected to become one of the world’s leading blue hydrogen manufacturers.

Go global

Ambani outlined his vision for “internationalizing Reliance” in his speech last year.

Over the past year, Reliance has made overtures to big deals overseas, such as a potential acquisition of UK pharmacy chain Boots, which was never finalized. Investors will want to see if the appetite for global acquisitions still exists amid a slowing global economy.

Then there’s always the possibility of a curveball in the encounter, Bathini said. “Never underestimate the power of Ambani senior” to surprise the market, he said.



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