Reliance Jio AGM 2019 Key Announcements: New Initiatives and Strategic Partnerships

At the 42nd annual general meeting (AGM) held on August 12, 2019, RIL Chairman and Managing Director, Mukesh Ambani, made several key announcements. These announcements highlighted not only the company's strategic initiatives but also its vision for the future. Below, we discuss the main highlights of the AGM.

Oil-to-Chemicals Business and Investment from Saudi Aramco

One of the most significant announcements was the agreement between Reliance Industries Limited (RIL) and Saudi Aramco. According to Mukesh Ambani, Saudi Aramco will acquire a stake in RIL's oil-to-chemicals business, representing a 20% investment. This strategic partnership is expected to bring substantial growth opportunities and further strengthen RIL's position in the global market.

Launch of Jio Fiber Service and Triple Play

Mukesh Ambani also provided details about the upcoming launch of Jio Fiber, a triple-play service including broadband, TV, and landline services. As part of this package, Jio Fiber users will have access to a free subscription to several over-the-top (OTT) platforms, although the specific list has yet to be announced.

Valuation of the Oil-to-Chemicals Division

During the AGM, Mukesh Ambani emphasized that the oil-to-chemicals division of RIL is valued at 75 billion INR, including debt. This implies that the stake to be sold to Saudi Aramco has an estimated valuation of 15 billion INR.

Strategic Roadmap to Zero Net Debt Status

Ambani revealed a clear roadmap for RIL to become a zero-net-debt company in the next 18 months. This ambitious goal highlights the company's focus on financial discipline and sustainable growth.

Performance and Share Price Movements

RIL shares have shown an upward trend since the last AGM in July 2018, with a 20% increase. However, they have underperformed the Nifty index by 11% over the past three months, indicating a mixed performance.

Microsoft Azure Partnership and Cloud Solutions

RIL announced a partnership with Microsoft, under which Jio will leverage Microsoft Azure cloud platform to develop innovative solutions tailored to the needs of Indian businesses. This partnership is expected to enhance RIL's technological capabilities and provide more efficient and scalable services.

New Commerce and Retail Innovations

One of the key areas of focus for RIL is the new commerce initiative, which aims to transform unorganized retail into organized retail. Mukesh Ambani highlighted that new commerce presents a 700 billion business opportunity and that RIL's retail arm will unveil a new initiative called Reliance New Commerce. This initiative will digitally connect thousands of Kirana stores across the country, enhancing their reach and service offerings.

Jio Fiber Plans and Subscription Packages

Jio Fiber plans are set to be bundled with subscriptions to leading premium OTT applications. Additionally, the new Jio set-top box will be compatible with broadcast cable TV signals from numerous local cable operators, such as Hathway DEN and GTPL. Jio Fiber users will also receive a free landline phone connection.

Market and Financial Overview

As of the last AGM, Reliance Jio had received over 15 million registrations from nearly 1600 towns across India for its Jio Fiber broadband service. The company plans to launch its IoT service in January 2020, which is expected to generate around 20,000 crore in revenue.

Investment in Digital Infrastructure

To support its digital expansion, RIL has invested 3.5 lakh crore in creating state-of-the-art digital infrastructure, which includes the largest optical fiber footprint in India. The company's digital set-top box will offer various advanced features, such as ultra-high-definition entertainment, virtual reality content, multi-party video conferencing, voice-enabled virtual assistants, interactive gaming, home security, and other smart-home solutions.

Future Plans and Dividend Distribution

Mukesh Ambani expressed his commitment to providing more dividends and bonus issues to shareholders. He further stated that the company aims to list Jio and Reliance Retail within the next five years, highlighting RIL's long-term vision and strategic focus.

Overall, the AGM in 2019 highlighted RIL's forward-looking approach and strategic partnerships aimed at driving growth and innovation. These initiatives underscore the company's determination to establish itself as a leader in the digital space and contribute to India's economic development.