Index heavyweight Reliance Industries’ 46th annual general meeting (AGM) is expected to set the tone for the markets in the coming week, with investors eyeing a slew of major announcements.
The AGM on August 28 comes just a few days after Jio Financial Services’ listing, and Qatar Investment Authority’s acquisition of stake in Reliance Retail Ventures Limited (RRVL).
As has been the case over the past few years, RIL’s AGM has become more about its newer divisions that are growing rapidly, though the oil-to-chemicals (O2C) segment still forms the biggest chunk of the conglomerate’s revenue.
In its 2022 AGM, the company announced the rollout of Jio 5G across India by December 2023. In 2021, it was the entry into green energy, and the year before, it announced the induction of Google as a minority investor.
Here’s what to expect from this year’s AGM
IPO timelines
Investors are eagerly waiting for value to be unlocked in the telecom and retail divisions of RIL. Responding to shareholders in the previous AGM, Chairman Mukesh Ambani had mentioned that he would update them on Jio and Retail IPOs during the next AGM.
Jio Platforms already has big investors like Google, General Atlantic, Abu Dhabi Investment Authority, and Meta Platforms. Reliance Retail Ventures counts Qatar Investment Authority, KKR, Silver Lake Partners, and the sovereign wealth funds of Saudi Arabia and Singapore as investors, among others.
Jio Financial Services
The listing of Jio Financial Services, previously known as Reliance Strategic Investment, was the big event in the week gone by. From the AGM, analysts and investors expect to know more about the areas it wishes to venture into as a non-banking financial company.
As of now, JFS has only announced a partnership with Blackrock to float a mutual fund company. The partnership is targeting an initial investment of $300 million.
While analysts say consumer and merchant lending is inevitable for JFS, many investors also expect it to go big in the insurance space. Jio already has an insurance broking business in place with over 17 insurance partners. Foreign broking firm CLSA believes this can be scaled up faster.
5G, Jio AirFiber
In its annual report, RIL reiterated its target of a pan-India 5G rollout by December 2023. More updates are expected on the same, as well as announcements on attractive 5G prepaid plans. Additionally, the street is keen to know if there are any plans for a Jio 5G smartphone, just like the JioBharat 4G phone.
In its last AGM, RIL had announced the JioAirFiber, which delivers fibre-like 5G speed over the air without any wires. However, the device is not available for purchase yet. Analysts expect the launch date for JioAirFiber in this AGM, along with details on how the JioBook laptop is faring.
New Energy
RIL has committed to $10 billion of investment over three years in the new energy business, and becoming net carbon zero by 2035.
So, an update on the progress of various projects underway in the new energy space will be a key detail to look out for. Commissioning timelines and the estimated earning potential of these projects is also expected to be disclosed.
According to foreign broking firm Bernstein, RIL may earn nearly $10-15 billion from its new energy business spanning solar energy to hydrogen fuel, by 2030. “We believe the clean-energy business to be worth Rs 200 a share today, but with plenty of scope for expansion over time,” Bernstein said in a June 9 report.
Reliance Retail Ventures expansion
RRVL has been aggressive in reaching different consumer segments with the rollout of new format stores like Tira and Yousta. It has also expanded its FMCG brand ‘Independence’ to north India.
Going ahead, analysts expect RRVL to go gung-ho on e-commerce, strengthen the supply chain, and focus on more acquisitions. On this front, the company’s Executive Director Isha Ambani could make significant announcements, say analysts.
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