Big bets on AI and green energy from Reliance Industries, but no indication on when Jio and the retail company will go public

Big bets on AI and green energy from Reliance Industries, but no indication on when Jio and the retail company will go public

 Mukesh Ambani emphasized that the Reliance Group is on track to more than double its size by the end of this decade. He identified key sectors such as Oil-to-Chemicals (O2C), Retail, Jio (its digital services arm), Media, and Green Energy and Fuels as the primary drivers of future growth.

The 47th Annual General Meeting (AGM) of Reliance Industries Limited (RIL), held since its Initial Public Offering (IPO), was perhaps the most anticipated event of the week. The market was eagerly awaiting announcements regarding the IPO timelines for Reliance Jio and the retail business. However, during his hour-long speech, RIL’s Chairman and Managing Director, Mukesh Ambani, did not address these IPO timelines. Instead, he focused on the growth trajectory, stating that he expects both Jio and Retail to double their revenues over the next three to four years.

Regarding the revenue outlook, Ambani stated, "Jio is poised to be a cornerstone of India‘s digital future." He projected that both Jio and the Retail business would double their revenues and EBITDA within the next three to four years. He also highlighted the significant growth potential in the media sector.

The high expectations surrounding the IPO timelines for Reliance Retail and Jio stemmed from a declaration made at the 2019 AGM, which stated that these businesses would be listed within five years. 

Despite the absence of an IPO update, Mukesh Ambani outlined the company's growth strategy, emphasizing the "five growth engines"—O2C, Retail, Jio, Media, and Green Energy and Fuels. He noted that Reliance is uniquely positioned to expand into new businesses adjacent to these core sectors. He highlighted that three of these growth engines already have a valuation of over $100 billion each and are expected to grow even faster in the future.

On rewarding investors, Ambani emphasized the company's commitment to wealth creation, mentioning that the Board is considering issuing bonus shares in a 1:1 ratio on September 5. He assured investors that Reliance would continue to operate within a prudent financial framework, allocating resources to high-return projects while maintaining a strong balance sheet.

A significant part of Ambani's address focused on Deep Tech and Artificial Intelligence (AI). He shared his vision for the future, which includes transforming Reliance from a technology implementer to a creator of cutting-edge technologies. The company plans to build large-scale AI infrastructure, including Gigawatt-scale AI-ready Data Centers in Jamnagar powered by green energy, to offer AI for all. These initiatives aim to have a transformative impact on sectors such as agriculture, healthcare, education, and small businesses.

Ambani also highlighted the strong performance of Reliance’s Upstream and Oil-to-Chemicals (O2C) businesses. Key factors contributing to this success include a focus on operational excellence, diversification in processing 60 grades of crude oil (including 13 new grades), chartering more vessels on a long-term basis amidst geopolitical tensions, strong domestic demand for fuels and downstream chemicals, and leveraging deep-tech and advanced manufacturing capabilities. The company is pioneering the use of AI-powered real-time optimization across its supply chain and advanced crude oil and feedstock characterization to drive increased profitability.

Ambani also reiterated Reliance’s emergence as a deep-tech and new energy entity. He stated that affordable and sustainable round-the-clock clean energy is critical for India’s accelerating growth. The company has committed Rs 75,000 crore to establish a new energy ecosystem. He revealed that construction has begun on an advanced chemistry-based battery manufacturing facility with an annual capacity of 30 GWh in Jamnagar, with production expected to start in the second half of next year. This facility will initially assemble Battery Energy Storage Systems (BESS) for various markets and progressively integrate backward to cell manufacturing and eventually to battery chemical production. According to Ambani, this deep integration will help control quality and costs, ultimately resetting energy costs.