RIL AGM likely to focus on new energy business, Jio and Retail IPOs

1st AGM since Ambani family's next gen joined board

At Reliance Industries’ (RIL’s) annual general meeting (AGM) this week, shareholders will be looking for insights into new energy initiatives and initial public offering (IPO) timelines for retail and telecommunications.

This is also the first AGM since the next generation of the Mukesh Ambani family joined the board in a non-executive capacity.

RIL will host its 47th AGM via virtual conferencing this Thursday. Analysts with Bernstein in their note on the company said, “We expect the upcoming AGM to focus on the potential listing of Jio and Reliance Retail. The timelines for commencement of new energy projects will be another focus.”

BofA Securities analysts expect detailed business updates on the new energy sector. They noted that RIL’s focus over the next 12 months will be to bring new energy manufacturing facilities onstream while simultaneously developing the local supply chain.

In recent AGMs, Ambani, chairman and managing director, has indicated that 2025 will mark the beginning of a transition to green hydrogen. This transition includes the new energy ecosystem, with the solar photovoltaic gigafactory expected to commence phased operations this year.

Kotak analysts have observed that progress in the new energy sector seems slower than initially planned. The original plan involved investing $10 billion in the new energy ecosystem over three years, but so far, only around $2 billion has been invested.

They added, “As new energy is a new foray, and initial learnings need to be made, the pace of capital expenditure will gradually rise.”

BofA also expects updates on the retail front, including partnerships with global players like ASOS and Shein for fast fashion. They expect RIL to provide insights into its re-entry into the quick commerce sector and potential updates on its hyperlocal strategy.

The brokerage firm added, “While we don’t expect any granular or detailed updates on potential IPOs on a forum like an AGM, it remains to be seen if we hear a generic update in terms of extended timeline for potential IPOs.”

Kotak analysts believe that the upcoming AGM and potential value-unlocking through a separate listing of the telecommunications/retail business could serve as key catalysts for further rerating.

Ambani has often used the AGM podium to make significant announcements in the past. Last year, the billionaire announced his three children will hold non-executive directors postions on the board and indicated his intention to lead operations for another five years while mentoring the next generation.
 

Ambani’s children — Isha, Akash, and Anant — were appointed non-executive directors in December. Isha and Akash have addressed shareholders at previous AGMs.

Street expectations

·         Detailed update on new energy business

·         Hyperlocal strategy for quick commerce

·         Timelines for telecommunications/retail IPO

·         Ambani next-gen’s first AGM as board members