Reliance Industries to shift focus from oil to technology e-commerce giant. Mukesh Ambani led Reliance Industries has been largely regarded as an oil company who has attained massive wealth through various coal mining and oil rigging plants.
With the potential of Jio coupled with investments from IT majors like Facebook Inc. Reliance Ltd. is turning around the business to an e-commerce and technology driven company. On Wednesday, Ambani will face shareholders at Reliance Industries Ltd.’s 43rd annual meeting (AGM), he’ll be speaking on behalf of an empire that is increasingly breaking free from oil-price fortunes. The billionaire’s string of deals with MNCs from Silicon Valley players this year, the latest being QualComm (Rs 730 crore) have propelled Reliance into the IT sector.
Moreover, the stock has more than doubled since a low in March to a record as Jio Platforms Ltd., Reliance’s digital services business unit, netted almost $16 billion in a fundraising blitz. Mukesh Ambani has also been the only Indian to be enlisted currently in the top 10 Billionaires of the world.
Jio Conquers Another
The flurry of deals for Jio have backed Ambani’s ambition to morph Reliance from an energy company to an e-commerce giant. They’ve also reduced oil’s influence on the company’s stock price. The company’s shares have a beta of 0.14 with Brent crude now. Meaning a 1% weekly drop in oil causes no more than 0.14% fall in Reliance. This factor was as high as 0.7 during the 2008 meltdown, data compiled by Bloomberg show.
But the tie-up with Facebook has given the venture a Silicon Valley stamp of approval and has lured a dozen investors, enthused by the unit’s potential to shake up online retail, content streaming, digital payments, education and health care in a market of 1.3 billion people.
“Business-to-consumer sectors like retail and digital are more resilient to economic shocks”. Said Harsh Dole, an analyst at India Infoline Finance Ltd. “These sectors fetch a premium return for valuation. The stock has been a beneficiary of that, no doubt.”
Facebook, which paid $5.7 billion for about 9.99% of Jio Platforms. Has said it expects the tie up will make WhatsApp the primary way. For millions of India’s small businesses connect with customers. The messaging app has roughly 400 million users in the country. Which are about the same as Reliance Jio Infocomm Ltd.’s subscriber base for wireless services. JioMart & JioMeet were the most recent endeavors of the company.
#RIL is holding its 43rd Annual General Meeting (Post-IPO) on Wednesday, 15th July 2020 through Video Conferencing (“VC”) / Other Audio-Visual Means (“OAVM”) from 2:00 p.m. onwards.
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