Asian business tycoon Mukesh Ambani recently presented an outline for the future of Reliance Industries during the company’s Annual General Meeting (AGM) on Thursday. He highlighted the potential for the group’s revenue to double and announced a significant gift for the nation in the form of an AI cloud initiative. Ambani also discussed the company’s plans for bonus shares, updates on Reliance Retail, and the development of data centers, emphasizing its evolution into a tech giant. However, this AGM left many investors wanting more, particularly regarding key topics such as IPO announcements for the retail and telecom arms, 5G monetization details, and succession planning.
Investors Anticipate IPO Announcements
Not just 3.5 million investors in Reliance, but over 180 million investors across the country were eager for announcements regarding the IPOs of Reliance Jio and Reliance Retail. This anticipation was particularly noticeable given that Reliance Retail’s revenue surpassed ₹3 trillion in the previous fiscal year. However, Mukesh Ambani refrained from mentioning anything about the IPOs, despite having announced plans for them during the 2019 AGM. That announcement had resulted in a nearly 10% spike in Reliance’s stock. It’s noteworthy that almost five years have passed without substantial movement on these IPOs. Jefferies, a financial services firm, predicts that Jio’s IPO may finally materialize next year, potentially achieving a valuation of around $112 billion.
Limited Focus on New Energy Announcements
While Ambani did speak about data centers during the AGM, his focus on new energy initiatives was noticeably minimal. This is surprising given his significant investments in Reliance’s new energy business, particularly in developing mega green energy camps in Jamnagar. The company is working on solar PV, energy storage, electrolyzers, fuel cells, and power electronics with plans exceeding $10 billion. However, reports suggest that only $2 billion has been invested in the first three years of this plan, indicating a sluggish pace of progress.
5G Monetization Details Remain Absent
In July, when Jio implemented new tariffs, expectations were high for insights into 5G monetization during the AGM. Investors were looking for detailed information concerning this critical rollout. Although Ambani did share information about the 5G rollout and R&D, stating that Jio now has over 130 million 5G users and has spent $437 million on research and development, no updates on monetization strategies were shared.
No New Insights on Succession Plans
Approximately two years ago, during the 2022 AGM, Mukesh Ambani outlined a succession plan, designating Isha Ambani to oversee retail, Akash Ambani for the telecom arm, and Anant Ambani for the new energy business. Following this, in 2023, all three children were appointed to Reliance’s board, a move seen as a step in the succession strategy. Given this background, investors hoped for additional updates regarding the succession plan but were met with disappointment.
Stock Performance: A Positive Turn
Interestingly, on the day of this AGM, Reliance’s stocks saw a positive upswing for the first time in five years. From 2020 through 2023, the company’s stock had consistently dropped on AGM days. However, in 2024, a 1.5% increase was recorded. Looking back, there has been a 24% increase in Reliance stocks from the previous year’s AGM until now, a stark contrast to the 10% rise witnessed during the announcement of IPOs in 2019.
