Keypoints of 44th AGM of Reliance Industries and the new Green Energy Venture

 

The World-famous India’s most valuable company, Reliance Industries Limited(RIL) conducted its Annual General Meeting (AGM) on 24^th June 2021. Mukesh Ambani’s RIL is a market mover and therefore all eyes were on the AGM, for the announcements and future plans of the Reliance group. As expected, some interesting announcements were done. (click here for the full text of the speech)

At the AGM the chairman Mukesh Ambani made a number of key announcements which are focused on the future of the Reliance industries. The inclusion of Saudi Aramco as the strategic partner for their oil to chemical (O2C) business was much expected.

The launching of the 5G technology and the decision to work together with Google for 5G and low-cost mobiles are really impressive. The recent acquisitions by Reliance was for strengthening their retail sector and Ambani’s claims about the retail sector are a positive one.

Apart from all this the announcement of getting into the green energy business and giving importance to that is the most impressive announcement as far as I am concerned. It was not just an announcement but a total plan which is a highly impressive one considering how much the green energy is inevitable for the future and still India lagging behind is an opportunity to take an upper hand. Let's check some key announcements in detail.

Reliance-Aramco partnership

The deal was announced even before the pandemic. A 20 percent stake sale of the Indian conglomerate was delayed by the Covid pandemic and in the 44^th AGM, Chairman Mukesh Ambani confirmed that the deal might get completed during this financial year. This will allow the biggest energy company in the world to invest in Reliance

Yasir Al-Rumayyan

As part of the deal Reliance Industries included Saudi Aramco’s chairman Yasir Al-Rumayyan as an independent director to the board. This move is very good in getting the shareholder's belief for the deal as the deal is already delayed.

Even though Reliance is now diversifying and making good profits their main business was this oil to chemical arm which was underperforming the last years. Now with Aramco coming in as a strategic partner, it is good news for Reliance.

5G the Future

All of us will be remembering how 4G was so popularized. Without any delay, we could easily say that it was Jio, the Reliance arm which made 4G a huge success so fast.

“JIO is not just working to make India 2G-MUKT… but also 5G-YUKT.”

This is what Mukesh Ambani quoted about 5G and Jio. We are hearing speculations about 5G rolling out soon in India and it's Jio that is standing in the forefront. Reliance Jio is trying to get the first-mover advantage in 5G as they have a reputation to keep now.

Mukesh Ambani stated that Jio has started testing its 5G solutions in India and he claimed that it successfully achieved speeds in excess of 1Gbps. Also, he explained the unique position of Jio to quickly upgrade from 4G to 5G.

To develop into a 5G end to end ecosystem, Jio is working with global partners to successfully roll out not only 5G enabled phones but also other 5G enabled gadgets.

Reliance collaboration with Google

Jio’s partnership with Google is so promising and is expected to make a big impact in the future. As part of their partnership, an ultra-affordable 4G smartphone is announced to be available from this September 10. It is been said that the phone has been developed combinedly by Jio and Google and is described as “next-generation, feature-rich, but extremely affordable phones”.

The JioPhone Next is said to be a low-cost smartphone affordable to the poor people of the country as well and even at a lower price it is expected to have applications from Jio, Google, and Android play store.

In addition to the development of Jio phone, Reliance also announced the partnership with Google is adopting the Google Cloud service for its other businesses. For scaling up and improving customer experience Reliance is planning to shift its core retail business to Google Cloud infrastructure.

Reliance Retail – The next big thing

Mukesh Ambani was heaving praises about the retail segment. No wonder he does that because Reliance Retail is the next in-line arm of the RIL to grow multifold. The recent acquisitions Reliance did were for scaling up the retail business. Mukesh Ambani claimed that the retail business will grow 3X in the next 3 to 5 years.

Reliance added 1500 new stores taking their count to 12,711. Even with challenging conditions due to the pandemic restrictions Reliance Retail gave good returns. After all these acquisitions, Ambani is still positive of acquiring businesses that will help them to heighten up their offerings.

Reliance has partnered with Kirana stores which enabled them to add 3 lakh stores across 150 cities last year but was heavily affected due to Covid 19. Even then they have set up a goal of adding 1 crore Kirana partners in the course of the next 3 years.

The Green Revolution of Reliance

Among the announcements it’s the highly ambitious new renewable business that is having the most long-term impact and most of the people are looking curious. I termed it as a revolution because it takes a huge heart and planning to convert from their oil to chemical business to the renewable sector. Also, the amount Reliance is going to invest is huge. They are willing to invest a whopping 75 thousand crores in the next 3 years to develop the Green Energy business.

Green energy is not new in India but India is lagging behind many countries and also India is promoting it which provides an extensive scope of growth in this field. Reliance is planning to take advantage of this situation and we know-how Reliance pushes into the market, we have seen that in Jio becoming a market leader thrashing many of its competitors so easily.

Reliance is planning to set up 4 Giga factories in Jamnagar, Gujarat as part of the green initiatives that will manufacture and fully integrate an end-to-end new green energy ecosystem.

1. Integrated solar photovoltaic module factory for the production of solar energy.
2. Energy storage battery factory for the storage of intermittent energy.
3. Electrolyser factory for the production of green hydrogen.
4. Fuel cell factory for the conversion of hydrogen into motive and stationary power.

It is very interesting and hopeful to see how confident and well planned Mukesh Ambani and his Reliance Industries Limited is about its new green energy initiative. Let’s now see how well they can execute their plans. It is so sure that if Reliance could do well in this new venture, then it will be a big boost for India in this field.