🧠 RIL's Plan to Double Its Value
RIL's annual general meeting was full of exciting new announcements as always. So, we're here to decode these announcements for you.
Reliance's Annual General Meeting is a huge event for the finance world.
In fact, it is probably the second-most awaited financial event after the Budget announcement.
And this year's meeting was the most awaited one because everyone was hoping that Ambani would announce his succession plans.
Well, he kinda did but that was definitely not the most exciting part of the event.
There were a lot of interesting announcements about 5G, green energy and lots more.
It was basically RIL revealing its blueprint to double its value by 2027.
So, here we are to give you the download in detail and explain some of the jargon and technical concepts that you may not have understood.
🔍 Focus on 5G
After the general introduction and the announcement that Reliance was the country's highest taxpayer in the private sector, Mukesh Ambani got down straight to 5G.
The man knows what the public wants.
And while most predictions about the AGM stated that the company would just launch a new 5G phone, Reliance did us one better.
But let's start from the beginning.
One of the first things that Ambani did was to establish how he was better than the competition.
Because currently, Jio is the only telecom company that has the capability to provide standalone 5G.
But what is standalone 5G?
📶 Standalone v/s Non Standalone 5G
To read this article, you need an internet connection on your phone. And to make sure you do get this internet connection, telecom companies set up fiber optics or mobile towers.
Now, the current network infrastructure is built for 4G networks.
So, we need to build new infrastructure to get 5G connectivity.
But building this new infrastructure is super expensive.
And telecom companies that are burdened with the spectrum charges and licensing fees, don't have enough money to create a brand new infrastructure network.
So, they are taking a shortcut.
They will broadcast 5G radio signals through the existing 4G infrastructure.
But not Jio. The company is spending over Rs. 2 lakh crores to take standalone 5G network to every part of India by 2023.
For this it will have to build a whole new infrastructure network. Why is Jio not taking the easy way?
Because the easy way will lead to lags while you are using the internet (you know what we mean if you were live with us for the AGM: catch it here in case you missed it!).
With the Jio way, you will get super-fast high-speed internet with no lags.
This opens up a lot of interesting new avenues, and will be a boon for freelancers, streamers and Zoom call sufferers.
And if this wasn't enough, it is also launching Jio AirFiber: a pluggable device that gives you super high speed internet (like the kind you get with fiber optics), without any wires.
So, you can truly work on the go, without worrying about bad network.
But this device isn't just for work. According to Ambani, it will truly revolutionize your content watching experience.
For instance, you will be able to watch multi-camera views of the next IPL watch, without lags (something that the team is super excited about!).
And you'll be able to host watch parties with friends seamlessly.
So, work sorted and play sorted.
However, RIL's offerings didn't stop here.
His next offering: Jio's Cloud PC.
What is a cloud PC?
So, a cloud PC is basically a laptop that you can log into from the internet.
Confused?
Let's assume you are using a phone that has 64 GB storage and is pretty slow.
Now, you get a freelancing job that requires you to have a high-end laptop that is fast and has a lot of storage.
But you don't want to shell out Rs. 40-80K to buy a new device.
You can just log onto a cloud PC, which has more storage and more processing capacity.
And no more worrying about buying a new device or constantly updating your old one.
How to use this cloud PC? Just through the Jio AirFiber device. Simple!
This could be a gamechanger for a lot of middle-income households in India that find it difficult to afford high-end laptops and phones.
It will reduce their economic burden and help them get better jobs.
So far, so good?
But this was just the beginning…
🤩 Reliance's Retail Ambitions
After making massive headways in the 5G space, Reliance finally shifted the conversation to its retail arm, Reliance Retail, which is into everything from clothes, to groceries and medicines.
The focus here was mainly on JioMart, which Reliance claims has become one of the top 10 retailers in Asia.
And Isha Ambani perfectly used the over 3 lakh eyeballs on the AGM to market JioMart's easy ordering procedure through WhatsApp.
This WhatsApp integration could help JioMart gain a lot of users as that is one app literally every Indian has.
And what's more, to truly capitalise the retail space, Reliance is launching its own FMCG vertical.
The move kind of makes sense for the company. You see, it already has partnerships with a lot of kirana stores and not one but two e-commerce platforms: JioMart and Milkbasket.
It could easily track what products people like the most and start producing them under its own brand.
And then it could sell these products at a discount (initially) to increase sales.
The company is already planning to launch products at a lower range to cater to the middle class.
Not just that, RIL is planning to give its distributors a 6% margin as compared to the 2%-3% margin that other FMCG companies give.
So, HUL, Britannia, ITC and Adani Wilmar better watch out!
🤔 What Else Went On?
The company is ironically planning on expanding its oil business and its green energy business at the same time.
It will be investing Rs. 75,000 crores into its oil-to-chemicals business over the next 5 years.
And on the green energy side, RIL's focus is on solar energy, wind energy, hydrogen and EV batteries.
It plans to begin end-to-end solar PV manufacturing by 2024 and transition from grey hydrogen to green hydrogen by 2025.
The meeting ended with Ambani announcing what everyone had already expected: that his kids are taking over the business.
Isha Ambani will handle Reliance Retail, Akash Ambani will handle Jio, and Anant Ambani will handle the green energy business.
With this, Ambani highlighted that his business will not face the same problems that his father's had after his death. Reliance is in secure hands but still under Ambani's steady control.
So, the meeting like every year was super eventful. Our takeaway from the meeting? RIL is truly fuelling India's digital push. The new offerings from the company will truly take the internet to every household.
And not just that, fast internet will also fuel growth of startups, especially metaverse based companies that have not caught on in India yet.
What do you think was the most interesting part of the AGM?
⚡In a line: RIL's AGM went beyond people's expectations and the announcements made have the potential to boost India's digitilisation, revolutionise the green energy space and change the way we order groceries.
💡Quick question: Do you think these plans will be enough to actually double Reliance's value?
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