Shares of Reliance Industries Ltd (RIL) settled lower on Monday, making it the fourth straight time when the RIL stock declined on the day of annual general meeting. Reliance Industries settle the day at Rs 2,442.55 on BSE, down 1.11 per cent. The stock fell 0.83 per cent on the day of its 45th AGM in 2022, 2.34 per cent the day of its 44th AGM in 2021 and 3.70 per cent on the date of its 43rd AGM in 2020.
While Reliance Industries made a host of announcements this time, Street was disappointed as the AGM speech did not gave any specific roadmap on the listing of Reliance Retail and Reliance Jio. This is even as Chairman Mukesh Ambani said several marquee global strategic and financial investors have shown strong interest in Reliance Retail, adding that he will update investors about the progress in due course.
"The AGM held by Reliance was largely uneventful for the market. The key highlight was the succession plan. However, the company's stock experienced a decline due to the absence of clear timelines regarding the telecom and retail IPOs," Santosh Meena, Head of Research, Swastika Investmart Ltd.
Reliance Industries shares closed at Rs 2,442.55 on BSE, down 1.11 per cent.
At its AGM, Ambani formalised his succession plan at the conglomerate. Ambani announced the appointment of Isha, Anant, and Akash Ambani as non-executive directors. He said he will mentor his three children Akah, Isha and Anant "so that they can provide collective leadership". While Ambani didn't say he will step down after five years, he said he will use the next five years to train the next generation leaders.
Ambani also announced September 19 as the launch date of much awaited Jio AiFiber and said Jio Financial Services (JFS) will enter the insurance segment with general, life and health insurance products, potentially partnering with global players. He said that like Reliance Retail and Reliance Jio, he is confident that Jio Financial Services will prove to be an invaluable addition to Reliance Industries’ ecosystem of consumer-facing businesses.
“JFS will enter the insurance segment to offer simple, yet smart, life, general, and health insurance products through a seamless digital interface, potentially partnering with global players. It will use predictive data analytics to co-create contextual products with partners and cater to customer requirements in a truly unique way,” said Mukesh Ambani during the announcements.
Akash Ambani, on the other hand, introduced Jio Smart Home services.
Sonam Srivastava, Founder and Fund Manager at Wright Research, PMS said: "For investors, the AGM offers both opportunities and risks. The strong financials for FY23 are encouraging, but the company's multi-front expansion could stretch resources and affect short-term gains. The board changes, including Nita Ambani stepping down and the next generation stepping in, signal a generational shift that could bring fresh perspectives but also potential missteps. In summary, Reliance's AGM announcements are a mixed bag. They offer promising growth avenues but are laden with challenges that could impact execution. The company's ambitious plans in 5G, AI, and smart home technologies indicate a willingness to invest in future-ready businesses. However, the speed and efficiency of these rollouts, coupled with the ability to navigate regulatory landscapes, will be critical. Investors should tread carefully, balancing the potential for long-term growth against the risks inherent in rapid, multi-faceted expansion," Srivastava said.
Anny Ghosh, Senior Consultant at Alpha Capital, RIA, said the AGM centred around two significant announcements that had been previously disclosed to the market. The first was the unveiling of a joint venture initiative and JFS. The second highlight was the introduction of Jio Fiber, which was identified as a potential disruptive force within the sector.
"Financially, the earnings reported during the AGM were consistent with market projections, reflecting a steady performance in line with the industry's expectations. Beyond immediate financial figures, the AGM also spotlighted the company's strategic shift in its oil business. This shift involves a deliberate pivot towards Green Energy and sustainability-oriented models, indicative of the company's commitment to a more environmentally responsible approach. Jio 5G is already present in over 96 per cent of the census towns. This makes Jio 5G the fastest-ever 5G rollout anywhere in the world," Ghosh said.