Mukesh Ambani-led Reliance Industries Limited's (RIL's) plans to buy out the entire 74% stake of Bharti Enterprises in its two insurance ventures with AXA is poised to be first of the many new businesses targeting mass consumers that the company will foray into in the coming months.
While a bank is not on the cards, digital devices and financial services are up next, with indications that a mutual fund could come under the fold of the elder Ambani's empire after it recently ended a non-compete pact with the younger Anil Ambani's ADAG conglomeration. ADAG controls the Reliance Mutual Fund.
Eight years ago, RIL, before an asset division involving the Ambani brothers, had launched handsets priced as low as Rs 500 in a dramatic foray into mobile telephony. Its next offering could be a tablet computer that costs Rs 10,000 or so, say industry sources.
"Its funding of a Bangalore startup is part of the plan to flood the market," said a source who did not want to be identified.
The company, which had acquired pan- India spectrum for broadband wireless access (BWA) for high speed data access, may also offer rich content, applications and services over the Internet.
Analysts said the company, with a turnover of more than R 250,000 crorewould set aside cash for expansion and diversification.
"The company would keep the cash with itself for future opportunities. Such a big company would keep around R 20,000 to 30,000 crore in cash," said SP Tulsian, an independent analyst.
A leading Mumbai-based analyst, advising RIL's financial service rivals, said its entry into asset management (mutual funds) was a logical next step.
Last March, RIL, which is set to become debt-free by March 2012, inked a joint venture with the US-based DE Shaw group to offer financial services in the Indian market.
Mukesh Ambani told shareholders at the company's annual general meeting (AGM) this month that "consumer-centric" businesses such as retail and telecom broadband businesses were new growth hotspots.
Reliance Retail will soon enter the wholesale cash-and-carry business.