InvestorQ : What were the major highlights of the Reliance Industries AGM held on August 12, 2019 and what are the key takeaways?
Priyanka Jain made post

What were the major highlights of the Reliance Industries AGM held on August 12, 2019 and what are the key takeaways?

Swati Naik answered.
3 years ago

The first time that RIL made a real splash at the AGM was in 2016 when it formally announced the launch of its Jio service. In the last 3 years, Jio has not only changed the telecom industry in India but has also changed the outlook for RIL like never before. In fact, in terms of long range outlook for RIL, this 42ndAGM may be the most significant for RIL. Here are some of the key highlights of the Reliance AGM.

a) During the AGM, Mr. Ambani announced the big Aramco deal where the world’s most profitable oil company would invest $15 billion for a 20% stake in the oil and chemicals business of RIL valuing just the oil and chemicals business at $75 billion.

b) For the first time, the company has clearly given a target date for totally getting out of debt. Out of the $21 billion in debt that the company has right not in its books, RIL plans to become zero-debt by March 2021. RIL will be using part of its existing cash of $19 billion and part of the $15 billion received from Aramco to retire the debt.

c) The AGM has also made a commitment that both Reliance Jio (the telecom and broadband business) and Reliance Retail would be listed on the bourses in the next 3 to 5 years for greater retail visibility.

d) In a major move, RIL has also tied up with Microsoft to bring the Microsoft Azure into Jio ecosystem and launch a nationwide cloud infrastructure. The idea here is to take on Amazon head-on, which leads in cloud infrastructure; being first offs the block.

e) While concrete plans have not yet been announced Mr. Ambani has indicated that the Jio ecosystem will be used to get into emerging technology areas like cloud computing, artificial intelligence and internet of things (IOT). This likely to be instrumental in the transformation of RIL from traditional oil and chemicals company to a technology driven company.

f) The AGM also announced that the much awaited Jio Fibre (the all India broadband network) would be launched on September 05th and the phased roll out over the next one year will target nearly 240 million households across India.

g) Finally, the AGM has also set ambitious targets for the growth of Jio mobile numbers. Jio has already emerged as the largest player in India with 34 million subscribers. Jio is now targeting 500 million subscriber targets before the end of the current calendar year.

In short, it appears to be another long frame AGM and is likely to give some real worries for other telecom and DTH players in the market.