At Reliance Industries Limited’s (RIL) 42nd annual general meeting (AGM) on Monday, 12th August 19, Mukesh Ambani the chairman of RIL addressed the stakeholders. He made some announcements which are set to disrupt the industry. Here are those announcements and their after-effects on the market.
- Zero net debt in 18 months – In 42nd AGM, Mr. Ambani said that the RIL has set the target to reach net debt within 18 months. He assured to reward shareholders with more dividends and periodic bonus issues.
- Vision beyond hurdles – Mukesh Ambani said that the slowdown in some sectors is interim. India definitely has that the potential to grow in $10 trillion economy by 2030.
- New Launches – Reliance Jiofiber broadband will launch on 5th of September. Jiofiber is going to be a combo of broadband, fixed and Television. With the use of Jiofiber one can watch a movie on same date of the r while seating in a couch in his living room. RIL’s this product can also be a market breaker as Jio was.
- Adding more speed to life – RIL’s Jiofiber will provide network speed around 100 mbps to 1000 mbps. INR 700 to INR 1000 is the proposed price for this network service.
- Free voice calls – Mr. Ambani also stated that the voice calls from Jiofiber fixed line phones will be free anywhere in the entire country.
- Largest FDI till now – One of the largest companies in the world by revenue, Saudi Aramco the Saudi Arabian national petroleum and natural gas company based in Dhahran is about to take 20 per cent stake in Reliance oil to chemical business for enterprise value of $75 billion. Saudi Aramco will supply 5,00,000 barrels crude oil to reliance refineries per day. Mukesh Ambani said that “this deal will be the biggest foreign investment in the history of RIL as well as the largest foreign investment ever in India.
- Transformation in retail fuel business – RIL is all set to sell the 49 per cent stake in its fuel business to the London based, one of the world’s seven oil and gas “supermajors” company, BP for INR 7000 crores. Mr. Ambani said that 1400 existing reliance petrol pumps and 31 aviation fuel stations will be shifted to a new joint venture of RIL and BP. He added that “we aim to expand to 5500 petrol pumps in the next 5 years.”
- A step towards digital transformation of India – At the AGM, RIL chairman announced the Internet of Things (IoT) for entire country, home and enterprise broadband, broadband for SME. The Jio and Microsoft is about to form a long-term alliance to speed up the digital transformation of India. They are proposed to launch new cloud data centres.
- On J&K and Ladakh – After removal of article 370 in J&K and Ladakh, now any investor can invest there. RIL will create a special task force for development activities in Jammu & Kashmir as well as Ladakh.
Announcements at RIL’s 42nd AGM shocked the industry. The announcements by the RIL chairman drove RIL shares up to 12%, it is the greatest rise in shares of RIL from last decade. Chairman’s speech spurred worries of a repeat of what happened 3 years ago when Jio explode in the telecom sector. Now Jio became India’s first and worlds second most used telecom network. Shares of their competitors in the telecom industry faced a downfall. Shares of telecom majors Bharati Airtel fell 4% and Vodafone Idea slid almost 5%. Shares of PVR and Inox Leisure fell as much as 8% and 10%, respectively, on the news, after trading resumed following a holiday on Monday.
It will be interesting to see how people welcome Jiofibre and will it become the trendsetter as Jio is.