Reliance Industries to consider bonus issue of shares, a first in 7 years

Energy-to-telecom conglomerate Reliance Industries at its annual general meeting on Thursday made several key announcements, including a proposal to issue 1:1 bonus shares, plans to rank among the world’s top 30 companies, and detailed timelines for its new energy business.

Its Chairman and Managing Director Mukesh Ambani, however, did not share any details on a potential listing of the company’s retail and telecom divisions, a key announcement that the market was hoping for.

Ambani began his address by informing shareholders that the company’s board of directors would meet on September 5 to consider and recommend a 1:1 bonus share issuance, the first since 2017.

In his opening remarks, Ambani expressed his vision of RIL advancing from its current position among the world’s top 50 most valuable companies to the top 30 in the near future. He attributed this expected growth to RIL’s “strategic adoption of Deep-Tech and Advanced Manufacturing”.

He said Reliance had now become a net producer of technology. This year’s speech was themed “Becoming A Deep-Tech and Advanced Manufacturing Company”.

Ambani also placed equal emphasis on the new energy division, projecting it to become as large and profitable within the next five-seven years as the oil-to-chemicals (O2C) business, which has been built over the past 40 years.

Outlook

“We believe that our New Energy business will be truly unique — delivering cash flows that are less cyclical and more predictable,” Ambani said. He also forecasted that digital services venture Jio and Reliance Retail would each double their revenues and Ebitda within the next three-four years. Ebitda is earnings before interest, taxation, depreciation and amortisation.

For the entire consolidated operations, Ambani said: "Overall, the Reliance Group is well on track to more than double in size before the end of this decade and grow faster in the decades ahead.”

In a key highlights statement released by RIL on Thursday, the company said: "Solid foundation will ensure doubling of value by 2027.”

Ambani also delivered on the street’s expectation for a granular timeline for the new energy business. He said RIL’s electrolyser manufacturing unit would be operational by 2026, while the battery manufacturing facility is set to commence production in the second half of next year.

The company will start by assembling Battery Energy Storage Systems (BESS) for utility-scale applications and pack solutions for residential, commercial, industrial, telecom, and mobility markets.

“Over the next few quarters, we will integrate backward to cell manufacturing and eventually to battery chemicals production,” he said.

By 2026, according to Ambani, RIL will bring online solar generation projects on a round-the-clock basis at GW scale in a phased manner. In its past announcements, RIL had stated plans to establish 20 Gw of solar energy generation capacity by 2025.

Ambani also hinted at plans to export green fuels, saying that the company’s coastal infrastructure, including 2,000 acres of land at Kandla port, will provide a strategic advantage for producing, storing, evacuating, and shipping green fuels both within India and globally.

New investments

Among the new investments announced were plans to set up 55 Compressed Biogas (CBG) plants by 2025, launch an energy plantation pilot project for an integrated CBG plant, and add 1.5 million tonnes of PVC and CPVC capacity and 1 million tonnes of specialty polyester capacity by 2026-27.

Ambani further said RIL plans to expand its Very Large Ethane Carriers (VLECs) fleet to nine from the current six, which are used for sourcing ethane from North America.

In the oil and gas sector, RIL will leverage its exploration and production expertise to develop low-carbon energy solutions, including geothermal energy, underground coal gasification, natural hydrogen, and helium.

Isha Ambani, executive director at company’s retail arm Reliance Retail, announced plans to enter the luxury jewellery segment with a curated, design-led experience. “The company is also exploring the fashion jewellery and accessories segment to broaden its market reach,” she said.

Shrinking direct employment

Addressing the decline in direct employment at RIL, Ambani said the company was shifting towards newer incentive-based engagement models rather than the traditional direct employment approach. “That is why the direct employment numbers show a slight dip in the annual figures, although the total employment created by Reliance has gone up,” he said.

As of March, RIL had 347,000 employees at the group level, down from 389,000 the previous year.