Gaurav Bora (Market Expert)
Data is new oil so we should not see Reliance as traditional petrochemical business it has become tech giant now and whole world is keeping an eye on it. Reliance is well-positioned to navigate the macro headwinds and diversified earning streams but with conservative gearing. There has been a sharp recovery in the RIL stock as investors reassess growth prospects in the post-pandemic scenario. Investors are betting on Jio’s access to India’s huge consumer market. Reliance Jio holds highest in the industry with a 33.4% market share, followed by Vodafone Idea(30.8%) and Bharti (25.6%). In 2019 AGM Reliance Chairman Mukesh Ambani announced Reliance will be debt free by March 2021. The string of investments from technology giants and private equity firms will go toward slashing debt at Reliance Industries.
Net debt as on March 2020 1.61 Lac Crore
Transaction Announced :
Facebook-Jio Deal – 43,574 Crore
Right Issue – 53,125 Crore
Silver Lake Jio Deal – 5,656 Crore
Vista-Jio Deal – 11,367 Crore
BP-Fuel Retailing Deal – 7,000 Crore
Total Transaction Value 1,20,722 Crore
Remaining Debt 40,278 Crore
Equity Value of Jio Platform 4.91 Lac Crore
Remaining stake in Jio 86.56%
Reliance can sell another 8.2% stake in Jio Platform to become debt free
US PE General Atlantic – 6,420 to 7,176 Crore
Saudi Arabia’s PIF – Amount not disclosed yet
Reliance Saudi Aramco – 1.13 Lac Crore
With these strategic deals now possibilities are limitless for Reliance.
Investors are betting on Jio’s access to India’s huge consumer market, and its potential to shake up traditional industries in the country from retail to education and payments with its technology. Reliance Retail is set to build a strong Omni-channel retail business with its diverse physical presence, huge subscriber base through Jio, Whatsapp and Facebook, wide app ecosystem on Jio’s digital platform, and foray in payment banking. The company is aggressively digitalising small retailers through Whatsapp Kirana, targeting to set up over 15m merchant POS over time, which will support last-mile customer connectivity and drive cash & carry business.
Retail has grown to become India’s largest retailer delivering superior value to its customers with unique retail brands like Reliance Fresh, Reliance Smart, Reliance Market, Reliance Digital and RelianceSmart.in. Reliance Retail serves over 100,000 customers every hour, and has the patronage of more than 117 million registered customers. Reliance Retail has adopted a multi-prong strategy and operates neighbourhood stores, supermarkets, hypermarkets, wholesale cash & carry stores, specialty stores and online stores and has democratized access to all types of products and services across all segments for all Indian consumers. Reliance Retail operates over 11,300 stores pan India with approx. 26 million square feet of retail space and is growing rapidly.
The strategic investments in digital services and organised retail platforms underpin Reliance’s participation in the next leg of value creation in India.