Must know about Reliance Industries Ltd (RIL) – 42nd AGM (2019) complete summary & key takeaways

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42nd Annual General Meeting (AGM) of Reliance Industries Ltd (RIL – 2019)

Reliance has become India’s largest and most profitable company – both in public and private sectors in 2019.At the heart of new value creation strategy is innovative Philosophy of transforming relationships into partnerships.

Partnerships with leading global and Indian companies, with millions of local businesses, SMEs and micro-enterprises across India. Partnerships with new tech-enabled businesses, platforms and social enterprises.

All 3 major growth engines – Oils to Chemicals division, Jio and Retail have done exceedingly well in the past year.

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O2C (Oil to chemical) divison:

Reliance and BP signed a Joint-venture in the petroleum retailing business.

Reliance has the most complex and integrated Oils to Chemicals business globally. As the world moves towards renewable energy sources and electric vehicles, Reliance has positioned itself far ahead of the curve to create new value.

Announcement about the biggest foreign investment in the history of Reliance – Saudi Aramco and Reliance have agreed to form a long-term Partnership in Oil to Chemicals (O2C) division. Saudi Aramco will invest in Reliance for a 20% stake in Oil to Chemicals division at an Enterprise Value of US$ 75Billion for the O2C division.

Reliance Jio:

Jio crossed the 34 Crore subscriber mark to remain the world’s fastest growing digital services company. Today, Jio is India’s largest telecom enterprise in terms of subscribers, revenues and profits. Jio has truly become the DIGITAL GATEWAY OF INDIA.

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In a manner of speaking, before JIO, India was DATADARK. And now with JIO, India is DATASHINING BRIGHT! The potential for growth is immense, and HALF ABILLION
(50 Crore) customers is now well within reach. Reliance has invested nearly 3.5 LAKH CRORE towards creating a state-of-the-art digital infrastructure across India, with the largest optical fiber footprint.

Recently the company has divested about 1.17 lakh crore of hard infrastructure into separate infrastructure investment trusts or InvITs to better monetize and unlock value from these assets.

Because of early adoption of the ongoing enhancements to LTE technology, the Jio wireless network is already 4G PLUS and can upgrade this to 5G at minimum incremental cost.

The investment cycle for Jio is now complete. Only marginal investments in access are now required to grow capacity to meet growing demand. This gives tremendous OPERATING LEVERAGE and SUPERIOR RETURNS on INVESTMENTS for years to come.

While most of investments are complete, the Jio has so far fired up JUST ONE of the engines of Revenue generation namely mobile broadband. Even with one engine Jio has been profitable from its first quarter of commercial operations and now company is ready to kickstart FOUR more engines of CONNECTIVITY REVENUE for Jio.

1. INTERNET OF THINGS (IoT) all over India.
2. HOME BROADBAND.
3. ENTERPRISE BROADBAND.
4. BROADBAND for SMALL AND MEDIUM BUSINESSES.

And the Revenues from each of these engines will kick-in within THIS FINANCIAL YEAR itself.

With JIOFIBER you get lightning fast broadband speeds of up to 1 GBPS. Earlier this year RIL acquired controlling stakes in three leading Cable MSOs – Hathway, DEN and GTPL who have direct relationships with over 30,000 LCOs.

ANNOUNCEMENT that starting 5th SEPTEMBER of this year – on the THIRD anniversary of JIO’s launch – the company is launching JIOFIBER services on a COMMERCIAL basis.
Customers should pay for only one service, either voice or data. Not both.

In India even the most basic JIOFIBER plan STARTS WITH 100 Mbps speed and the plans all the way up to 1 Gbps or 1000 Mbps. The pricing of plans are less than 1/10th the global rates, to make it accessible for all. JioFiber plans will be priced between 700 to 10,000 Rs per month to suit every budget and every need.

With this, pleased to announce that voice calls from HOME to any Indian operator – mobile or fixed – will be ABSOLUTELY FREE Forever.

Premium JIOFIBER customers will be able to watch movies in their living rooms the same day these movies are released in theatres! The service is called as JIO FIRST-DAY-FIRST-SHOW. JIO POSTPAID PLUS, to deliver a platinum-grade service and product experience.

So, JIOFIBER customers who opt for annual plans called JIO-FOREVER plans, will get an HD OR 4K LED TELEVISION and a 4K SET-TOP-BOX ABSOLUTELY FREE. This is called the JIOFIBER WELCOME OFFER.

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Jio has invested in 14 startups that embody the JIO DNA. The plans for a few of these are as follows:

FIRST, Blockchain technology all over India. Over the next 12 months, JIO will install across India one of the largest blockchain networks in the world with tens of thousands of nodes operational on day one.

“Data is wealth and Indian wealth must remain in India.”

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SECOND, Edge computing and Virtual and Mixed Reality content.

And FINALLY, CLOUD INFRASTRUCTURE across India. Today, MICROSOFT’s Cloud platform AZURE is one of the world’s leading cloud platforms.

The company is glad to announce that Jio and Microsoft have entered into a globally unique long-term alliance to accelerate the digital transformation of our country.
As part of this alliance, while Jio sets up a network of large world-class datacenters across India, Microsoft will bring its Azure cloud platform into Jio’s datacenters.

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2 special announcements for STARTUPS AND SMALL and MEDIUM BUSINESSES.

FIRST: JIO is a startup built in India for India by Indians and the company has a special place in our hearts for startups. So Jio is ready to take away the cost by making THE CONNECTIVITY AND CLOUD INFRASTRUCTURE ABSOLUTELY FREE FOR BUDDING STARTUPS.

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SECOND: Micro, small and medium businesses are the bedrock of Indian economy. The company is taking bold step of giving the applications along with connectivity to small businesses for 1/10th the cost starting at 1,500 per month.

Reliance Retail:

Reliance Retail has crossed 130,000 crore turnover to cement its position as India’s largest retailer. It is four times larger than the 2nd largest retail player. It is larger than all the other major retailers put together.

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The Retail business has grown phenomenally, registering a 7-fold increase in revenue and a 14-fold increase in profit in the last six years. The company has expanded the retail footprint at a rate of 8 stores per day, opening a total of 3,000 new stores this year, higher than any other retailer globally.

Reliance Digital is the undisputed leader in India in consumer electronics retailing.

With the acquisition of Hamleys, Reliance Retail has transformed into a global retailer with presence in 18 countries. The company is proud to own a global category leader in children’s premium toys that can be taken to other parts of the world.

New Commerce is a massive new business opportunity of USD 700 billion. The main purpose of New Commerce is to completely transform the unorganized retail market,
which accounts for 90% of India’s retail industry.

The 3 crore merchants and kirana shop owners, who generate direct and indirect livelihoods for over 20 crore people, form the backbone of India’s commerce eco-system.
Reliance merchant Point of Sale (POS) Solution – Jio Prime Partner POS – is integral to company’s plan to create an ecosystem around small merchants.

Reliance’s New Commerce platform thus represents the Digital Symbiosis of Big and Small Enterprises.

Reliance’s 72 television channels reach 800 million Indians, representing more than 95% of the TV-viewing universe. Company’s News18-branded TV news platform
is the largest by regional footprint, ratings or revenue.

Last key notes (growth outlook):

At the end of largest capital expenditure cycle, company continue to be rated AAA for domestic debt and two notches above Sovereign rating for international debt –
the highest ratings for any industrial company in India.

The company is forming Jio world-class institute for higher education & research.

On the strength of our existing and new growth engines, The company is very confident that the company can grow by 15% annually over the next 5 years. The company has a very clear road-map to becoming a zero net debt company within the next 18 months that is by 31st March 2021.

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Video link for above 42nd AGM key takeaways: https://youtu.be/9AgiO3C0-z8

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– By NISM Certified Research Analyst & Investment Advisor