Ambani Charts plans to double the value of RIL

investment includes 2 trillion to launch 5G services across India, 75,000 crore in its oil-to-chemical (O2C) business, accelerated investments in its new energy business, and expansion into the rapidly growing consumer goods industry.

“I, along with our Board of Directors, will dedicate myself to making Reliance stronger, more resilient, more purpose-driven, and truly future-ready so that, in the near term, Reliance will more than double its value. Its golden decade in 2027, and continues to grow more rapidly thereafter,” Ambani said in his address to shareholders at the company’s annual meeting on Monday.

Even as the telecom unit is set to launch 5G services in major cities by Diwali and then across the country by the end of next year, the group is building new growth levers with its digital, new energy and FMCG businesses and Laying the foundation for this. To pass on additional responsibilities to the next generation of the Ambani family.

While Ambani had set a target of doubling the group’s value by 2027, he did not announce a value unlocking exercise through IPOs of its retail and telecom units, and some investors were waiting to hear about it.

RIL shares fell 0.84% ​​on Monday 2,596.8 on the BSE, the company’s valuation 17.56 trillion.

Reliance has raised close to 1.5 trillion for its retail and telecommunications units from global private equity investors, sovereign wealth funds and tech giants such as Facebook and Google. These investors will be keenly watching how the company executes the value creation roadmap set by Ambani at the annual shareholders’ meeting.

Ambani also said that the company will invest 75,000 crore in its O2C business over the next five years to set up India’s first carbon fiber factory and add capacity in other sectors such as polyester and vinyl. He also said that the group will accelerate its commitment to investment 75,000 crore towards setting up a fully integrated new energy manufacturing ecosystem in Jamnagar.

Ambani said that Reliance Jio will spend 2 trillion on building 5G infrastructure and completing the rollout of services across India by December 2023, calling it the fastest implementation in the world.

Jio did not mention the tariffs it would charge users for 5G services, but said the services would be priced cheaper. Jio will use so-called 5G standalone technology on top of its indigenous end-to-end 5G stack to provide affordable services to consumers, which will be rapidly adopted through affordable devices to be developed in partnership with Google.

Aniket Dani, director, CRISIL Research, said Jio’s capex plan indicates that there is a competition to gain market share quickly. “Crisil Research expects private players to open up” 3-5 trillion between this fiscal year and next, with top players spending~ 2 trillion. This is around the amount spent on 4G between FY 2016 and 2019 – this time squeezed into two fiscal years, indicating a flurry to grab market share early,” Dani said.

The carrier will also launch JioAirFiber, which will provide fiber-like wireless speeds through a plug-and-play router-like device called the JioAirFiber Home Gateway. It will also offer affordable personal computers on the cloud. Reliance Jio chairman Akash Ambani said that Jio 5G was positioned to offer captive or private 5G solutions for Indian enterprises.

Ambani said RIL plans to set up India’s first and one of the world’s largest carbon fiber plants at Hazira with a capacity of 20,000 million tonnes per annum. “Carbon fiber promises to be a multi-decade growth engine for O2C,” he said.

As part of its new energy business, the group now plans to set up another Giga factory, which will produce power electronics. RIL had earlier announced plans to set up four gig factories for photovoltaic panels, energy storage, green hydrogen and fuel cells.

Ambani said RIL’s 10GW solar photovoltaic cell and module factory in Jamnagar will start production by 2024 and the group is targeting to reach 20GW annual capacity by 2026.

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