Mukesh Ambani Sets Out Growth Path For Reliance’s Digital Business
Mukesh Ambani, chairman of Reliance Industries Ltd. (Photographer: Prashanth Vishwanathan/Bloomberg)

Mukesh Ambani Sets Out Growth Path For Reliance’s Digital Business

Billionaire Mukesh Ambani has laid out a growth plan for his digital business, days after netting over $15 billion in a fundraising blitz by selling stake in his digital and telecom unit and by issuing new shares.

“We’re in a rapidly changing world where digital connectivity, abundance of data and intelligent harnessing of data are reshaping value creation models across verticals,” Ambani, chairman and managing director of Reliance Industries Ltd., told shareholders in a letter on Tuesday.

Jio Platforms Ltd., the holding unit of Reliance’s telecom and digital assets, will use its partnership with Facebook Inc. to digitally enable and empower 60 million MSMEs, 120 million farmers, 30 million small merchants and millions of SMEs in the informal sector, Ambani said. Facebook announced in April that it will invest $5.7 billion to acquire a 10% stake in Jio Platforms.

Ambani said the retail arm Reliance Retail Ltd., increased its store space by nearly a third year-on-year to 28.7 million square feet in the year ended March 2020. It continues to grow in scale, driven by new store expansions across the geography, improving store throughput and favourable product mix, he said.

Reliance Retail and WhatsApp have entered into a commercial partnership agreement to accelerate digital commerce business on the JioMart platform and to support small businesses, he said.

Asia’s richest individual also said that RIL is working on the “contours of a strategic partnership” with Saudi Arabian Oil Co.—a minority stake sale in its oil-to-chemicals division. “The partnership gives our refineries access to a wide portfolio of value-accretive crude grades and enhanced feedstock security for a higher oil-to-chemicals conversion.”

The company sold 50% stake in its fuel retailing business to BP Plc. for around Rs 7,000 crore. The two companies have also formed a joint venture to grow their network of fuel retail stations and aviation fuels business in India.

Reliance banks on its consumer business, which grew at an annualised rate of 49.3% in the year ended March 2020 and contributes more than a third of its consolidated operating profit.

Its telecom arm, Reliance Jio Infocomm Ltd., had 387.5 million subscribers as on March, including 100 million 2G subscribers who transitioned to the 4G network.

Also Read: The Real Impact Of Jio PlatformsFundraising On RIL’s Balance Sheet

Ambani said their exploration business is on schedule to deliver peak production of 1 billion cubic feet equivalent of natural gas per day in 2023. It’s currently developing R-Cluster, Satellite Cluster and MJ fields—three projects in KG-D6 basin which are on track to monetise discoveries.

The firm invested Rs 77,444 crore, or $10.2 billion, in capital expenditure last year.

Also Read: Mukesh Ambani Joins Club of World’s 10 Richest

On Tuesday, RIL shares fell 1.55% to Rs 1,720.05 apiece on BSE while the benchmark Sensex rose 1.49% to end the day at 35,430.43 points.

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