PremiumMUMBAI : Reliance Industries Ltd (RIL) may update investors about the proposed stake sale in its oil-to-chemical (O2C) business to Saudi Aramco and the Jio-Google phone at the annual meeting on 24 June, analysts said.
Investors are awaiting an announcement on the pricing and launch timeline of the Jio-Google phone. Last year, RIL’s chairman and managing director Mukesh Ambani said that Google would partner with Jio to design an operating system to introduce an affordable entry-level smartphone.
“Over the last year, new investors have joined RIL’s digital and retail business at the subsidiary level, and RIL has formed new partnerships with global players like Google, Facebook, Microsoft, Qualcomm, etc. Investors now expect RIL to give direction to these businesses and announce groundbreaking products," said HSBC in its report dated 17 June.
Google invested $4.5 billion to pick up a 7.73% stake in Reliance’s digital arm Jio Platforms last year. The investment in Jio Platforms covered almost half of its commitment for its $10 billion India Digitization Fund.
Analysts expect clarity on the pricing of phones as tariffs on Jio-Google phones could act as a catalyst for the RIL stock.
Investors are also awaiting updates from RIL on inducting Saudi Aramco as a strategic partner in its O2C business.
According to a 15 June BofA report, RIL may name Yasir Al-Rumayyan, chairman of Saudi Aramco and governor of the kingdom’s wealth fund Public Investment Fund, as a director on its board during the annual general meeting (AGM).
In RIL’s annual report released last month, Ambani said that the proposed reorganization of its O2C business will attract a dedicated pool of investor capital. The company also said that the process of carving out its O2C businesses into a separate subsidiary is expected to be completed this year, and the reorganization will create an independent, global-scale growth engine for RIL, with a strong cash-flow generation potential.
O2C’s aim, RIL said, is to maximize crude to chemicals conversion while creating a sustainable growth business.
RIL’s e-commerce business, JioMart, which the company launched last May, has been expanding its ambit of offerings and geographical coverage.
An update on Reliance Retail embedding its e-commerce app JioMart into WhatsApp is awaited. This would allow 400 million users of India’s most popular messaging service to order products without having to leave the app.
Last April, Facebook Inc. bought a 9.9% stake in Reliance Industries’ digital unit Jio Platforms for $5.7 billion. Facebook-owned messaging giant WhatsApp also signed a pact with Reliance Retail.
According to past trends, RIL’s shares, which ended trading at ₹2,225.05 on Friday on BSE, are expected to hold strong in the run-up to the annual general meeting.
“Over the last 10 years, in the week and month post the AGM, the stock has outperformed the Nifty 6/10 and 7/10 times, potentially implying that the (AGM) speech has managed to give more confidence to consensus," said HSBC in its report, adding that over the past 10 years, it has seen an average surge of 140% in trading value on its AGM day against the volume traded just a month previously.
In the past 10 years, the RIL stock has outperformed the Nifty five out of 10 times and three out of 10 times in the month before the AGM and the week before the AGM date, respectively.
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