Big move by Mukesh Ambani as Reliance aims to double business in 3-4 years with...

Reliance Industries Ltd is gearing up to double its size by the end of the decade by focusing on its five growth engines, according to chairman Mukesh Ambani. These engines include its established oil-to-chemicals (O2C) unit and newer ventures like retail, digital, media, and green energy and fuels. Ambani stated that three of these businesses are already valued at over $100 billion each, with expectations for even faster growth. He made these remarks during a virtual address at the company’s 47th annual general meeting.

The new energy business is projected to generate revenues similar to what the O2C business achieved in four decades. The O2C business brought in ₹5.64 trillion in revenue for FY24, out of the group's total consolidated revenue of ₹10 trillion.

Before Ambani's address, Reliance announced a plan to issue bonus shares in a 1:1 ratio. This marks the sixth bonus share issue since the company went public in 1980, and the first since 2017. The company’s board of directors is set to meet on 5 September to approve the plan. Following this announcement, Reliance's stock rose 1.5% on the BSE, bringing its market capitalization to ₹20.57 trillion.

Mum on Listing

In the lead-up to the AGM, there were media reports suggesting a possible announcement about the listing of Reliance's retail and digital arms. However, Ambani did not mention any such plans. Instead, he emphasized the company’s renewed focus on new energy and digital ventures under Jio, led by his sons Anant and Akash Ambani. His daughter, Isha Ambani, heads the group’s retail business, which is valued at over $100 billion based on private investments.

While Akash and Isha provided updates on Jio and retail, Anant, who recently got married, did not address shareholders on the new energy business. Ambani has already announced a ₹75,000 crore investment in this sector over the next few years. He expressed confidence that the new energy business would become as significant and profitable as the O2C business within five to seven years. He also highlighted the potential of green fuels and AI-based solutions as long-term growth engines for Reliance.

Reliance plans to leverage India’s net-zero transition plan, competing with groups like Adani and Tata in the new energy sector. The company aims to achieve net-zero status by 2035 and is building a new energy equipment manufacturing facility in Jamnagar, Gujarat, spread across 5,000 acres. This complex, named the Dhirubhai Ambani Green Energy Giga Complex, will produce photovoltaic panels, fuel cell systems, green hydrogen, energy storage, and power electronics.

Solar PV Modules by Year-End

Ambani announced that Reliance will start producing solar photovoltaic (PV) modules by the end of this year. The first phase of its integrated production facilities, including modules, cells, glass, wafers, ingots, and polysilicon, will be completed in the following quarters, with an initial annual capacity of 10 GW.

To meet India’s growing demand for round-the-clock power, Reliance is also building an advanced chemistry-based battery manufacturing facility in Jamnagar with a 30 GWh annual capacity, expected to begin production in the second half of next year. Ambani stated that ongoing developments at the Giga Complex would position Jamnagar as the energy capital of the world by 2025.

Reliance is also establishing a fully automated, multi-GW electrolyzer manufacturing facility on India’s west coast, expected to be ready by 2026. Electrolyzers are crucial for producing green hydrogen, a key component of the new energy sector. The facility will support various technologies and be built to Industry 4.0 standards, allowing modular expansion to meet market demand.

Meanwhile, Akash Ambani announced a range of new digital and entertainment services under Jio, which offers both telecom and digital services. After the O2C business, Reliance’s largest revenue contributors are retail and Jio. On Wednesday, the Competition Commission of India approved Reliance’s plan to merge Jio’s media and entertainment businesses with Disney+ Hotstar, creating the country’s largest media entity, valued at $8.5 billion.

Doubling Down on Deep Tech

Ambani highlighted Jio's success, noting that its network, with over 490 million users, handles 8% of global mobile traffic. Jio offers data prices that are one-fourth of the global average and just 10% of those in developed countries. Reliance plans to double Jio’s revenues within three to four years and add a million homes to its broadband service every 30 days. The company also aims to connect India’s 1.5 million schools and colleges, over 70,000 hospitals, and 1.2 million doctors.

Reliance’s retail arm also plans to double its business by expanding its range of offerings in the coming years. Isha Ambani mentioned the company’s omni-channel strategy, which includes formats like Tira, Sephora, Kiko Milano, and Blushlace, along with enhanced beauty and personal care offerings across grocery, fashion, and pharma, both online and offline.

Reliance Retail, which operates around 19,000 stores in India, recorded ₹3.06 trillion in revenue and ₹11,101 crore in net profit for FY24. The company also acquired Metro India Cash & Carry and raised $2.1 billion in FY24.

Investing in New Capacities

Ambani stated that Reliance’s O2C business would invest in new capacities to meet growing demand and improve financial performance while focusing on sustainability. The company, which currently recycles over 2 billion PET bottles annually, aims to reach a capacity of 5 billion bottles per year by next year.

Despite challenges such as geopolitical conflicts and weak economic growth in Western countries, Reliance’s O2C business achieved ₹5.64 trillion in revenue for FY24, making it the first Indian company to surpass ₹10 trillion in annual revenue.

With the adoption of deep-tech and advanced manufacturing, Ambani believes Reliance, which took over two decades to join the top 500 global companies, will soon earn a place among the world’s top 30 companies.

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