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Mukesh Ambani to address RIL’s 43rd AGM today: Here’s what analysts expect
Analysts have said Mukesh Ambani may announce plans of leveraging recent partnerships as well as a vision to maximise oil to chemical conversion at his flagship at the RIL AGM.
Reliance Industries Limited’s (RIL’s) chairperson and managing director Mukesh Ambani will on Wednesday hold the company’s first-ever virtual annual general meeting (AGM).
Analysts, according to news agency PTI, have said Mukesh Ambani may announce plans of leveraging recent partnerships as well as a vision to maximise oil to chemical conversion at his flagship at the RIL AGM.
Among the key expectations from the 43rd AGM of RIL are strategic directions for the company after the coronavirus pandemic and further details on asset monetisation, analysts have said.
Reliance AGM 2020 Live updates: Mukesh Ambani to make key announcements
Sixty-three-year-old, who is now the world’s sixth-richest person, may also give a preview of his vision for decarbonisation of energy molecules to create value-added products with almost no carbon emissions.
Morgan Stanley said the AGM is “expected to report on progress on asset monetisation (INViTs and stake sale in O2C business), more details on strategic partnerships in digital business, growth plans on financial vertical, oil to chemical integration progress and new technologies”.
Ambani had announced plans to sell stake in RIL’s technology venture as well as in its oil-to-chemical (O2C) business to help become net debt-free by March 2021 at the last AGM on August 12, 2019.
The net debt-free status has been achieved much ahead of the deadline thanks to Rs 1.18 lakh crore amassed through the sale of 25.24% in its digital arm Jio Platforms Ltd to likes of Facebook, and the country’s biggest rights issue of Rs 53,124 crore.
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Jio Platforms houses India’s youngest but largest telecom firm Jio Infocomm and apps.
The sale of a 20% stake in O2C business, which comprises its twin oil refineries at Gujarat’s Jamnagar and petrochemical assets, to Saudi Aramco for an asking of $15 billion has however dragged on, although RIL has said it is on track.
“We expect investor focus to be on asset monetisation details especially on telecom InvITs and Saudi Aramco stake sale; capital allocation and growth strategy post-COVID-19; plans to leverage the partnerships with global technology peers and integrate its retail, digital and financials business; details on oil to chemicals integration and expansion of oil retail and new energy business with BP,” Morgan Stanley said.
Goldman Sachs said the focus of the AGM is expected to be largely on product launches around RIL’s partnership with Facebook potentially ranging from integration of JioMart with WhatsApp, additional colour on payments business and launch of a large product ecosystem (Super App) where Jio could integrate its services with WhatsApp.
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“We also expect additional colour on their vision to maximise oil to chemical conversion (to over 70 per cent) to create an annuity-like cash flow, potentially leveraging its proprietary Multi-zone Catalytic Cracking process and through a potential strategic partnership with Saudi Aramco,” it said.
BofA Securities said of the five key initiatives announced in last AGM, RIL completed the strategic stake sale of Jio, petro-retail, and moved to zero net debt.
“We might get an update on the remaining two - stake sale to Aramco and of Reliance Retail. We may get further updates on how RIL is looking capitalise on the digital trends and how it is leveraging and nurturing the start-up ecosystem,” it said.
It also added that progress/update on other initiatives from last AGM like home broadband, online grocery/new commerce initiatives, Jio First Day-First-Show along with a few new announcements are expected.
JP Morgan said the RIL AGM could have updates on Reliance Retail.
“While we do not expect any large strategic investor in Reliance Retail any time soon, this is a key potential event the investors will be watching, especially as the Jio Platforms stake sale seems done,” it said.
RIL shares scaled their fresh record high in Wednesday’s trade ahead of the 43rd AGM. It jumped as much as 1.67% to hit its new lifetime high of Rs 1,948.75.
(With agency inputs)
