(Bloomberg) – After raising more than $ 20 billion for his digital business in three months, billionaire Mukesh Ambani is preparing his retail unit for global partners, as his petroleum conglomerate turns to more than a billion consumers. from India to grow.
The richest man in Asia and the president of Reliance Industries Ltd. told shareholders on Wednesday that Reliance Retail Ltd. is receiving inquiries from investors and may start incorporating some in the coming months. The legacy petrochemicals business is also receiving attention from potential investors despite the fact that a proposed stake sale to Aramco is not proceeding as planned, he said.
“We have received great interest from strategic and financial investors in Reliance Retail,” Ambani told the more than 300,000 people who logged into the virtual conference from 41 countries. “We will install global partners and investors in Reliance Retail in the coming quarters.”
The 63-year-old tycoon has identified technology and retail as areas for future growth in a twist away from the energy business he inherited from his father who died in 2002. Retail is the next frontier for Ambani, who has just Finish selling nearly 33% of his digital business in the past three months to a host of investors, including Silicon Valley giants Facebook Inc. and Google, valuing Jio Platforms Ltd. at $ 58 billion.
Reliance Retail, which runs supermarkets, India’s largest consumer electronics store chain, a cash and transport wholesaler, fast fashion stores and an online grocery store called JioMart, reported Rs 1.63 trillion ($ 22k million) in revenue for the year through March 2020. The unit operates nearly 12,000 stores in nearly 7,000 cities.
Although Ambani presented a vision of a technological future for Reliance Industries at the shareholders’ meeting, the conglomerate’s stock plummeted. The tycoon confirmed that a planned sale of a stake in Reliance’s oil and chemicals division to Saudi Arabian Oil Co. for an estimated $ 15 billion had not progressed as planned, disappointing investors.
Frantic Fundraiser
The stock fell 3.8% on Wednesday, the biggest loss since May 14, slashing gains from a recovery fueled by Jio’s hectic fundraising. The shares are still more than double their value when they hit a low on March 23.
But most of Ambani’s focus during his 93-minute presentation to shareholders was on technology. He, along with his sons Isha and Akash Ambani, unveiled a number of services, including a fifth-generation wireless network early next year and a mega video streaming platform that will bring Netflix, Disney + Hotstar, Amazon Prime and dozens of other television channels under one umbrella.
“I think the time has come for a truly global digital products and services company to emerge from India and be among the best in the world,” he said.
Jio Platforms, unveiled last year, is now at the center of its ambitions to tap into a trillion Indians who are increasingly adopting mobile devices and data plans to shop online. Jio is considering an opportunity to change retail, content streaming, digital payments, education, and healthcare.
Giant rivals
Those plans would put Jio in direct competition with e-commerce giant Amazon.com Inc. and local Walmart Inc. operations. Alphabet Inc.’s Google is the latest to join Jio as an investor, with Wednesday’s announcement of a investment of $ 4.5 billion for a 7.7% participation.
“Each of the new hypergrowth engines has a great customer acceptance opportunity with scale, and will be a current valuation multiple times, making the traditional oil and gas business contribute less than 20% to valuation going forward. “said Chakri Lokapriya, chief investment officer at TCG Asset Management in Mumbai.
These are some of the plans established by Ambani:
Google and Jio are partnering to create an Operating System that can power a cheap 4G / 5G smartphone. JioMart, the online shopping portal, and WhatsApp will work closely together to create growth opportunities for millions of small Indian merchants and enable customers to seamlessly transact with mom-and-pop storesJio Glass to bring teachers and students together in virtual rooms 3D and holographic classes through our Jio Mixed Reality cloud in real timeBroadband for companies and small businesses; Narrowband Internet of Things (NBIoT)
Jio, which started as a wireless service provider as its first building block in 2016, will roll out its 5G network once the waves are available, according to Ambani. Unlike other operators, Jio will use locally developed technology for 5G, Ambani said, leaving him immune to political disputes linked to Chinese equipment providers in which global telecommunications companies are involved.
For more items like this, visit us at bloomberg.com
Subscribe now to stay ahead with the most trusted source of business news.
© 2020 Bloomberg LP
