For Reliance Industries (RIL), India’s largest private sector company, the continuing emphasis is on transition to become a new-age conglomerate with a focus on digital as it plans to foray into wind power generation. The induction of the next generation on the board and its CMD Mukesh Ambani committing to remain as chairman for the next five years would create a stable succession roadmap, according to analysts’ reports.
However, belying hopes there were no updates on the timelines of initial public offerings of its telecom and retail businesses, they added. According to ICICI Securities, RIL has laid out the blueprint for value creation over the next decade, with its emphasis on continuing its transition to a new-age digital conglomerate.
The company, with emphasis on growing its digital footprint, accelerating efforts to transition to new energy and specialty chemicals and continuing to leverage the world-scale platform established by its retail segment, sees a radically different future for itself over the next decade versus the last 40 years.
Additionally, the induction of Ambani’s children – Akash, Isha and Anant – on board and Mukesh Ambani committing to remain chairman for at least the next five years would create a stable succession roadmap, it said.
According to BoFA Securities, while RIL management gave updates on strategy across businesses in the AGM., there were no updates on the timeline of initial public offerings of its telecom and retail businesses. Earlier, there were several media reports of value unlocking through IPOs in certain firms.
“While the chairman mentioned Jio Financial Services, there were no major incremental updates related to business strategy in near-term. In our view, a section of the market that was expecting updates on incremental value-unlocking events would likely be disappointed,” it said.
There is likely to be more stake sales in the “due course” in Reliance Retail, like the recent one to Qatar Investment Authority (QIA), as the management said it has received interest from several marquee global strategic and financial investors, Kotak Institutional Equities said in a report, adding RIL expects retail to be its fastest-growing business in revenue and Ebitda.
According to Emkay Research, while the company is gearing up for a commercial launch of fixed wireless access services JioAirFiber on September 19, its pricing relative to Airtel remains the key. Airtel had announced AirFiber earlier this month. Reliance Jio’s 5G plans also are on track, with a countrywide rollout by December 2023.
RIL’s plans to partner with global technology players in wind energy manufacturing for a foray into wind power generation would alter its target of enabling 100 GW of solar capacity by 2030 to 100 GW of renewable energy capacity. Setting up a carbon fibre capacity would also enable reliable low-cost production of wind turbines, according to a report by CLSA.
According to IIFL Securities, there has been an upbeat outlook on retailing businesses.
“However, no indication on any timelines for the demerger of the telecom and retail businesses, which was keenly awaited; as such, meaningful immediate triggers seem to be missing,” it added.
