The 44th Annual General Meeting (AGM) of Reliance Industries Limited (RIL) was held to provide an overview of the company’s future goals. Reliance, as a company, does not need any introduction. It has to be one of the most common stocks for the Indian market participants. The AGM has always been a big event for the company.
Many companies have their AGMs but it is always more special when it comes to Mukesh Ambani’s corporation. Just as expected, the market was in a mood to play its volatile game as the AGM continued to impress a few and disappoint some others.
Here are the major takeaways you can take away from this big meeting.
The much-awaited Aramco Deal update
Mukesh Ambani is known to fulfil his promises, sometimes even before his own commitment. I believe the memory of him turning the company net debt-free much before his promised schedule will be popping up in your mind. In contrast, the Saudi Aramco deal has taken ages to reach its conclusion. The chairman said that “substantial progress” has taken place in their potential deal with Aramco. He also stated that the deal might get completed during this year (FY22).
This will allow one of the biggest energy companies in the world to invest in Reliance’s oil-to-chemical business which seems to be struggling when compared to the company’s other arms. To back his statements in front of shareholders, Yasir Al-Rumayya, chairman of Saudi Aramco and the governor of the Public Investment Fund, was included in the RIL board as an independent director.
Google and Jio working very closely
A new smartphone has come from the house of Jio and it has been developed with the aid of the US tech giant Google. The smartphone will be launched on September 10 for the Indian market. Apart from this, the two companies are getting involved in a cloud partnership that will help Jio with tech solutions. This will be a huge step in the future not only because Google is an established player but also because 5G consumer offerings services will be highly boosted with this.
The JioPhone Next might be a low-cost smartphone that can be affordable to the poor people of the country as well. Jio used this methodology in 2016-17 and we all know how bad all its competitors were hit. Maybe a repeat is on the cards? Even at a lower price, this smartphone is expected to have an entire suite of applications from Google, Jio, Android Play Store.
Green Energy is coming soon!
We at Marketfeed have been telling you that Reliance might be moving towards a green energy solution in the future. And, it feels great to be on the right side! Do read our article published in October 2020: Reliance to exit Oil & Gas Industry in Near Future?
Reliance has declared huge intentions in this AGM. They are going to build four Giga factories to manufacture and integrate all components of an end-to-end renewables energy ecosystem. The four factories include a solar photovoltaic module factory, electrolyser factory, fuel cell factory and energy storage battery factory.
For this, they are willing to invest a humongous sum of Rs 70,000 crore within three years. Green energy is not new to the world. Many countries are already utilizing it on a huge scale. However, India is lagging and this gives an extensive scope of growth to the companies that venture into this sector.
Brace yourself for 5G
We talked about how the Jio phone caused havoc among the mobile manufacturing companies a few years earlier. The main cause behind that was the launch of 4G technology. Now, we are moving ahead to 5G and Reliance is again trying to get the first-mover advantage. There have been two consecutive AGMs where the Ambanis have talked about 5G.
When this technology will come to the floor in our nation is yet to be told but they are confident that they will be the one leading this change. They have already tested Jio 5G solutions and it gave them a speed of excess of 1 GBPS. They also announced that not only a new 5G smartphone is under process but also a full range of other devices with 5G connectivity is under development.
The success will be driven by the Retail segment
Reliance Retail is going to be a giant in the future and we have absolutely no doubts about that.
There is a lot of background work going on with Reliance Retail which is not gathering a lot of attention right now. They are bolstering their relations with small stores on a ground level. This will provide huge uplift to their business in the future. Their partnership with Kirana stores saw 3 lakh shops added across 150 cities last year which was heavily impacted due to Covid-19. After adding 1,500 stores across India, their total count has reached 12,711.
They have set up a goal of adding one crore Kirana partners over the next three years. Highly Ambitious? Yes, but if achieved, Reliance Retail will fly really high. The company has announced that they will be setting up technology and innovation centres to increase their offerings to different customer groups. They still aspire to acquire a few more companies after adding the likes of Netmeds and Zivame under their umbrella.
Way Ahead
Reliance has a huge opportunity in the future. They are carrying large investments and this can reap great benefits in the long term. Green Energy, Jio and Retail will be their drivers but what about their prominent oil business? Saudi Aramco deal looks to be the only savour of their oil to chemical business but Reliance is no more just an energy company.
The stock has seen some heavy profit booking in Reliance in the last two days. But none of that takes away the great scope of growth they have. If you are a long-term investor in Reliance, don’t be demotivated by the recent fall. If everything happens as per their plan, Mukesh Ambani & co. will play a big role in India’s development.
