BackAmbani charts plan to double RIL’s value
Investments include ₹2 tn for 5G and ₹75,000 cr in oils-to-chemicals biz
PremiumMUMBAI/NEW DELHI : Reliance Industries Ltd chairman Mukesh Ambani unveiled mega investment plans totalling ₹2.75 trillion and outlined a succession plan, positioning the conglomerate for its next growth phase to double the group’s value by 2027, or the end of what it termed its golden decade.
The investments include ₹2 trillion to roll out 5G services across India, ₹75,000 crore in its oils-to-chemicals (O2C) business, accelerated investments in its new energy business, and expansion into the fast-moving consumer goods industry.
“I, along with our board of directors, will dedicate ourselves to making Reliance more robust, more resilient, more purpose-driven, and truly future-ready so that, in the near term, Reliance more than doubles its value by the end of its Golden Decade in 2027, and thereafter continues to grow ever more rapidly," Ambani said in his address to shareholders at the company’s annual meeting on Monday.
Even as the telecom unit readies to launch 5G services in major cities by Diwali and thereafter across the nation by the end of next year, the conglomerate is building new growth levers with its digital, new energy, and FMCG businesses and laying the groundwork for the next generation of the Ambani family to take up additional responsibilities.
While Ambani laid out his goal to double the group’s value by 2027, he did not announce the value unlocking exercise through the IPOs of its retail and telecom units, and something investors were waiting to hear about.
On Monday, RIL shares fell 0.84% to ₹2,596.8 on the BSE, valuing the company at ₹17.56 trillion.
Reliance has raised close to ₹1.5 trillion for its retail and telecom units from global private equity investors, sovereign wealth funds and tech giants like Facebook and Google. These investors will be keenly watching how the company executes the value creation roadmap laid out by Ambani at the annual shareholders’ meeting.
Ambani also said the company would invest ₹75,000 crore in its O2C business over the next five years to set up India’s first carbon fibre factory and to add capacity in other areas such as polyester and vinyl. He also added that the group would accelerate its commitment to invest ₹75,000 crore towards establishing a fully integrated new energy manufacturing ecosystem in Jamnagar.
Ambani said Reliance Jio will spend ₹2 trillion on building 5G infrastructure and completing the rollout of services across India by December 2023 in what it termed the fastest implementation in the world.
Jio did not mention the tariffs it will charge users for 5G services but said that services would be priced affordably. Jio will use so-called 5G standalone technology on top of its indigenous end-to-end 5G stack for providing affordable services to consumers, which will get adopted faster through affordable devices that will be developed in partnership with Google.
Aniket Dani, director of Crisil Research, said that Jio’s capex plans indicate a rush to grab market share early. “Crisil Research expects private players to shell out ₹3-5 trillion between this fiscal and the next, with the top player spending ~ ₹2 trillion. That’s around the amount spent on 4G between fiscals 2016 and 2019 —only squeezed into two fiscals this time around, indicating a rush to grab market share early," Dani said.
The carrier will also launch JioAirFiber, which will give fibre-like wireless speeds, through a plug-and-play router-like device called JioAirFiber Home Gateway. It will also introduce affordable personal computers on the cloud. Reliance Jio chairman Akash Ambani added that Jio 5G was positioned to offer captive or private 5G solutions for Indian enterprises.
Ambani said RIL plans to set up India’s first and one of the world’s largest carbon fibre plants at Hazira, with a capacity of 20,000 million tonnes per annum. “Carbon fibre promises to be a multi-decade growth engine for O2C," he said.
Under its new energy business, the group now plans to set up another Giga factory, which will produce power electronics. RIL had previously announced plans to set up four Giga factories for photovoltaic panels, energy storage, green hydrogen and fuel cells.
Ambani added that RIL’s 10GW solar photovoltaic cell and module factory at Jamnagar will start production by 2024 and that the group is targeting to scale up to 20GW annual capacity by 2026.
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