RIL Announces 1:1 Bonus Issue

With the end of another annual general meeting at Reliance Industries, here are the key takeaways.

• RIL has announced a 1:1 bonus share issue for all its shareholders - the largest bonus issue given by any Indian company.
• The company will launch the ‘JioPhone’ - an intellegent 4G enabled feature phone - for trial begining August 15, 2017.
• The JioPhones will be effectively free for alll Jio users and will encorporate the Jio Dhandhanadhan plan for Rs 153 per month.

Reliance will build, within a decade, new businesses of the same value as its existing businesses, said the oil giant’s leader.

Reliance has set a 30 percent target growth over the next decade for its reatil business, said Ambani.

The projects at Jamnagar will place Reliance as among the top 10 petrochemical producers globally, said Ambani.

Also Read: Planned KG-D6 Investment Will Increase RIL’s Exposure To Challenging Gas Business, Says Moody’s

Announcing the largest bonus issue by any company in India ever, Ambani declared a payback to its shareholders by rewarding one additional share for every existing share. The last time Reliance gave a 1:1 bonus was in October 2009, when the Ambani brothers were fighting in court over the price of gas.

The RIL stock rallied as much as 3.9 percent to Rs 1,588 after the announcement of the 1:1 bonus.

In line with Ambani’s plan of making Jio’s 4G services affordable and available all over India, JioPhones will be be given free of cost to all its service customers, he said. However, the handset will come with a one-time security deposit of Rs 1,500 refundable after three years, he added.

The phones will be available for user testing in beta from August 15 and for pre-booking from August 24. The company wants to roll out 50 lakh handsets every week, he added. Moreover, the devices will me made in India from the last quarter of 2017.

JioPhone's will also have a feature that allows users to connect it to TV sets and stream content. Along with this, users can also opt for a Jio Dhan Dhan Dhan pack for Rs 309 per month, that would allow users to watch almost 3-4 hours of videos daily, of their choice, on a large screen.

The TV offering could allow Jio to potentially rival cable, DTH service providers such as Dish TV India, Sun TV and Hathway.

“Voice will always be free” on a JioPhone, said Ambani. He went on to announce “digital freedom” on JioPhones since August 15 with unlimited data.

The phones will come with unlimited 4G data, only on the phone, for Rs 153 per month. The data would otherwise cost Rs 4,000 - 5,000 on other handsets, he added.

“With this, I am putting an end to unaffordable data forever”, he said.

He also announced a weekly plan for Rs 54 and a two-day plan for Rs 24 to make the services more accessible among masses.

The company will introduce an NFC support feature for JioPhone user on a later date, allowing them to connect their bank accounts, Jan Dhan accounts and UPI accounts with the phone. The feature will be uploaded on the phone through a software update, said Mukesh Ambani’s son Akash Ambani.

Mukesh Ambani announced the launch of the ‘JioPhone’, a 4G-web enabled smartphone, adding that it was a critical element in bridging the divide between digital India.

The phone includes:

• A distress call system
• Jio Music, Jio Cinema, Jio TV
• Powerful speaker
• Supports 22 major languages

"Jio has broken one record after another," Ambani said, speaking about the lastest telecom entrant in India. The network has added seven users per second for every day since its launch, he claimed, amounting to 125 million customers today.

Data consumption in India has grown from 20 crore GB per month to 120 crore GB after Jio's entry, and has been multiplying ever since, he said. The country has now taken over China and U.S. when it comes to data consumption, he added.

• Turnover has grown to Rs 3.3 lakh crore
• Net profit has grown from Rs 3 crore to Rs 3,000 crore
• Total assets have risen to Rs 7 lakh crore
• Market capitalisation has surged to Rs 5 lakh crore

Reliance Industries’ Mukesh Ambani has begun his address to company shareholders at the 40th annual general meeting since its initial public offer.

Reliance Industries Ltd. is working on a strategy to sell 20 crore 4G feature phones that are likely to be priced between Rs 1,000-1,500 in two years, people with knowledge of the matter told PTI.

The company is planning to launch it in the second half of August. However, it could not be ascertained if the handsets will be sold by Reliance Retail or the newest telecom operator Reliance Jio Infocomm Ltd.

Reliance has not yet finalised actual unit price of the feature phones, but it is likely to be in the range of Rs 1,000-1,500 a unit, one of the people who did not wish to be named told PTI. It will be smart feature phone with pre-loaded apps of Reliance Jio like Jio TV, Jio Money, he added.

Read More: Reliance Industries Plans To Sell 200 Million 4G Feature Phones In 2 Years

After clubbing its 4G LTE services with its LYF smartphones in December last year, Reliance Industries may bundle the upcoming feature phones with its Reliance Jio services. The move would allow the telecom company to acquire more data customers. Data is the only paid service under Jio after Mukesh Ambani announced free voice calls, messaging and roaming services since the launch of the network in September last year.

The company, however, has not made any comments regarding the clubbing of feature phones and its telecom services.

Reliance Industries Ltd. will hold its 40th annual general meeting from 11:00 a.m. onwards where chairman and managing director Mukesh Ambani and the board members are expected to talk about the company's past performance and future endeavours.

The AGM comes a day after the company reported its first quarter earnings for financial year 2017-18, which beat analysts’ estimates for the eighth consecutive quarter. Refining margins rose to a nine-year-high even after crude prices fell over the quarter due to a global oil glut.

Read More: RIL Surprises The Street For Eighth Straight Quarter

The board further revealed plans to invest Rs 20,000 crore in Reliance Infocomm Ltd.'s Reliance Jio through a rights issue from the parent company.

Also Read: Reliance Jio Plans To Raise Rs 20,000 Crore Via Rights Issue

Here are the key expectations from the AGM:

• Commentary around the end of the Rs 2.7 lakh crore capital expenditure plan, which began in FY13.
• Commentary around the investment being made into the country’s latest telecom entrant - Reliance Jio.
• Commentary around payout to shareholders through dividend, bonus issue or a buyback.
• Commentary around the company’s plan to sell 20 crore 4G feature phones in the next two years.