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    Reliance shares drop about 1% but regains on Jio Infocomm board changes

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    Reliance shares drop about 1% but regains on Jio Infocomm board changes

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    Mukesh Ambani will continue to be the chairman of Jio Platforms, the flagship company that owns all Jio digital services brands including Reliance Jio Infocomm.

    Shares of Mukesh Ambani-led Reliance Industries Ltd (RIL) fell about a percent on Wednesday but soon recovered. On Tuesday, billionaire businessman Mukesh Ambani resigned from the board of Reliance Jio Infocomm, handing over the reins of the digital and telecom arm of RIL to elder son Akash.
    At 9:24 am, shares of the oil-to-telecom conglomerate were trading almost a percent lower at Rs 2,504.4 on the BSE. But by 10:25 am shares were up at Rs 2,553, up 0.95 percent.
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    Reliance Jio Infocomm said in an exchange filing that the board of directors noted the resignation of Mukesh Ambani as the director of the company effective from the close of working hours on June 27. The board also approved the appointment of Akash Ambani, non-executive director, as the chairman of the board of directors of the company, the filing said.
    Mukesh Ambani will continue to be the chairman of Jio Platforms, the flagship company that owns all Jio digital services brands including Reliance Jio Infocomm.
    This resignation is seen as the beginning of succession planning.
    Market expert Prakash Diwan said the move is a clear indication in which direction the businesses are heading. “The next generation has been driving the business, but now they would also be in the driving seat. This also gives the opportunity to mentor some of the younger people in the family and then Mukesh Ambani can steer the business the way he would have envisioned in conjunction with the executive capabilities that the new generation is taking. So, I think it is an excellent move, goes very well with the overall direction in which the business is heading,” he said.
    Now that the succession plan is being charted out, there seems to be some clarity about Jio IPO.
    “It very decisively sets out the agenda for the Reliance Jio IPO. Now, it is a matter of time, it is a matter of when and not if. It is almost like an assurance that waits for the IPO it's around the corner. I think the stock is going to be interestingly smartening in tomorrow’s trade after this,” Diwan had said after the announcement on Tuesday.
    “My sense is a business like this where somebody like Akash Ambani has been instrumental and being with the business right from the inception really matters a lot and really helps. He's young, he's energetic, he's got a lot of enthusiasm for a new age business like Infocomm," he said.
    So, the appointment does take away a lot of the questions which were left unanswered or ambiguous earlier, according to Diwan. "It will be very positive for shareholders, for the simple reason that all investments are coming into the business and will continue to grow as the 5G rollout happens. We'll also have this clarity in terms of who is in the driving seat, parts of the business, which matters,” he added.
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