On July 15, India’s largest company Reliance Industries has a date with lakhs of its shareholders. RIL’s Annual General Meeting, its forty-third till date, will be held virtually for the first time because of the lockdown in Mumbai as well as the restrictions on gatherings.
At its last AGM in August 2019, RIL had outlined four broad action items,
1. Roadmap to becoming zero net debt company by March 2021
2. Strong interest from investors in Jio and Reliance Retail
3. Proposed stake sale in its Oil-to-Chemical division (O2C) with Aramco expected to buy 20 percent.
4. Value unlocking for real estate and financial investments and for tower/fiber infrastructure investment trusts
The company has already delivered on its promise of becoming a zero net debt company well ahead of schedule.
With the largest ever continuous fund raise of its kind, Reliance has raised a whopping Rs. 1.17 lakh crore by parting with just over a 25 percent stake in its technology arm Jio Platforms to a plethora of global firms, including Facebook.
Will we see action and announcements on the remaining items come Wednesday?
In a report titled– ‘What to expect from RIL’s AGM on July 15’ - Bank of America (Bofa) analysts say investors will watch for an update on the Aramco deal.
Morgan Staney in its note also lists an update on the Saudi Aramco deal as top of mind for investors. They write – “We expect investor focus to be on asset monetization details especially on telecom InvITs and Saudi Aramco stake sale”.
The latest RIL annual report did mention that the company is working to complete the Saudi Aramco deal. To recall, under the deal which was announced at the last AGM, Aramco was to buy 20 percent stake in Oil to Chemicals (O2C) division at an enterprise value of $75 billion.
What about Reliance Retail? It is India’s India's largest offline retail company and as the annual report pointed out, it had 640mn footfalls at 11,784 stores across 1800+ cities and towns in FY’20. JP Morgan analysts in their note say: “with Jio Platforms’ stake sale broadly done for the time being, the focus could shift to Reliance Retail and whether the company announces any new strategic partner for Reliance Retail”
Any news on monetization of the fiber Invit will also be taken well. In a note published a month ago, Kotak Institutional Equities wrote: “we would watch out for progress on this front now, given enhanced attractiveness of infrastructure for FTTH as well as enterprise businesses in a post-COVID world and its quasi-backing by Facebook and other large PE investors who are investing in JPL, whose subsidiary will be servicing lease liabilities.”
What about outward M&A from RIL? News articles have been highlighting that RIL is in advanced talks to buy stakes in Kishore Biyani's companies. BofA expects clarity on this at the AGM.
The bigger message that all the top analysts want to hear from the AGM is with regard to the company's overall digital game plan. To quote BofA analysts - "RIL in the AR stated that it is ushering in the Fourth Industrial Revolution (4IR) within the country. We may get further updates on how RIL is looking capitalize on the digital trends and how it is leveraging and nurturing the start-up ecosystem"
From the lows of March 2020, Reliance Industries is up around 120 percent. It is the best performing mega-cap stock and ranks among the only non-American company in the top-5 best-performing stocks globally since March-20. With a market capitalization of nearly Rs. 12 lakh crore, Reliance Industries is by far the biggest company in India.
Can the AGM on July-15, prove to be the next trigger? Watch this space.
First Published: IST