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Reliance AGM: Reliance Industries Limited (RIL) AGM 2021 Updates & More

Reliance AGM: Reliance Industries Limited (RIL) AGM 2021 Updates & More

Last updated: 23 Jun, 2021 | 02:30 pm

Reliance AGM: Reliance Industries Limited (RIL) AGM 2021 Updates & More

Reliance AGM: The 44th Annual General Meeting of Reliance Industries (RIL), is scheduled to be held on June 24, 2021. We have tried to capture the performance of each of the segments, and key expectations from tomorrow’s AGM. 

Consumer Businesses in Focus

  • The new-age Consumer Businesses Reliance Retail and Reliance Jio flourished in FY21. While the total Segment EBITDA for Reliance Industries fell by 3.6%, the Digital Services segment’s EBITDA rose 46% on-year to Rs 34,035 crore in FY21.
  • Together, the consumer-facing businesses of telecom and retail now contribute to more than 50% of total EBITDA. As it stands today, the future growth and the roadmap of the company is oriented towards its consumer businesses (Reliance Retail, Jio and Jio Platforms). The table below shows how much Reliance Industries made from each segment in Q4FY21.

  • Reliance Jio has been the stand-out performer, its revenue/EBITDA grew by 29%/43% in FY21. The telecom venture ended the year with 426.2 million customers. Given how this segment is performing, we can expect some announcements in tomorrow’s Reliance AGM.
  • Reliance Retail added 1,456 new stores last year when most of the other brands were closing their business. The company is likely to provide some details of growth roadmap for Reliance Retail in RIL’s AGM tomorrow. 
  • At a time when most retailers were rationalizing operations, Reliance Retail added 1,456 new stores in FY21 and made aggressive inroads into the Online business. It achieved 10% revenue contribution in 4QFY21, presenting huge potential.

O2C segment

  • FY21 was a significant year for RIL’s O2C segment, as it restructured its Refining and Petrochemical segments into the O2C segment to attract strategic partnerships. Splitting the business will make it easier for Reliance Industries to bring in strategic investors. It will also help to catalyse proposed stake sale to Saudi Arabian Oil Co. Read detailed analysis
  • According to a recent note by Jefferies, rising polymer spreads amid demand from automobiles, durables, consumer goods, medical supplies, and packaging industries will provide significant upside to Reliance Industries Ltd.’s petrochemicals operating income in FY22.
  • Jefferies expects a 50% upside in the RIL’s Petrochemical business if the prevailing momentum sustains. The O2C business of Reliance Industries accounted for 44% of the company’s segment EBITDA, as shown in the image below

Total Capital raised and debt position

  • Reliance Industries raised a whopping Rs 2.6 lakh crore ($36 billion) by selling stakes in its retail and digital assets with the aim to become totally net debt free.
  • As a result of this capital raise, the consolidated net debt fell 71% on-year to Rs 53,900 crore, according to analyst estimates.

Expectations from Reliance AGM

  • As in the past, the key focus would largely remain on telecom and retail businesses which collectively provided revenue of Rs 2.44 lakh crore in FY21.
  • The company is likely to announce the kick start of 5G services towards the end of 2021. Another interesting development during the AGM could be a revelation of 5G phones. Reliance also planned to partner with Google for the cheapest android phone but the process is facing headwinds on the supply and cost side. An update is expected in tomorrow's AGM.
  • Investors can expect the details of the road map to meet the 2035 target of de-carbonization, the transition from B2B to B2B2C (consumer), New Energy and New Materials business, and fuel to chemicals integration for the newly formed O2C division to provide ESG focus. This will help the company attract a new investor pool focused on ESG (Environmental, Social and Corporate governance) companies.
  • Another major announcement expected from the AGM is a price bonus. The company usually likes to keep the share price around Rs 1,000 to make it attractive for the retail buyers and hence a 1:1 bonus is expected.
  • At the start of the month, the company has kept 14 June as the record date for determining the eligible shareholders to receive the dividend for the financial year 2020-21. The dividend amount if declared will be announced in AGM.
  • The biggest expectation from the AGM is progress on Saudi Aramco deal in O2C business and Future Retail merger.

Reliance Industries shares had gained around 22% since the previous year. As it stands today, the future growth and the roadmap of the company is oriented towards its consumer businesses (Reliance Retail, Jio and Jio Platforms). As the economy improves further, Reliance Industries would continue to see improvement in its business in the upcoming quarters.

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