INSUBCONTINENT EXCLUSIVE:
companies, making Reliance Industries watchers wonder what he is really up to.
Ambani and his merger acquisition team have been extremely
busy past few months, cherry-picking nearly two dozen startups with visible potential
Last week, the company acquired conversational artificial intelligence platform Haptik
Half of these deals have been done in the telecom and media spaces, which suggests Team Ambani has much more up its sleeve even after
turning things upside down in a telecom industry that had already struck deep roots.
Some of the acquisitions, including music streaming
largest conversational AI platforms that counts Samsung, Coca-Cola, Future Retail, KFC, Tata Group, Oyo Rooms and Mahindra Group among
acquisition.
Last March, Reliance Jio announced integration of its digital music service, JioMusic, and OTT platform Saavn that powers
The combined entity, valued at over $1 billion, then brought in JioSaavn to compete with the likes of Amazon Music, Apple Music and
presence in 5G, Internet of Things, and open source architecture adoption.
India is yet to adopt 5G, with the spectrum allocation expected
to start only sometime in late 2019
social media and entertainment
It also does not hide its ambitions to make it big in the retail space.
It opened 365 exclusive Jio points, adding 2.9 million sq ft (up 16
per cent) in the nine months ended December 2019 while its listed peer Reliance Retail added 260 stores (around 2.2 million sq ft).
Reliance
Retail last month acquired mid-segment menswear brand John Players from ITC
RIL unveiled Retail 2.0, a programme that aims to cannibalise e-commerce to achieve a unique convergence of online and offline retailing
across formats through omni-channel presence.
Analysts on Dalal Street are taking note
on RIL increasingly cite the strengthening secondary businesses, alongside solidity in the primary energy interests, as factors supporting
the stock, which has grown three times in last four years
said in a statement announcing December quarter earnings
Research wrote in a report.
Jio reported its fifth straight profitable quarter in October-December, with a 65 per cent year-on-year jump in
bottom line, boosted by strong user additions and increased data usage
Oil and gas, petrochemicals and refining still contribute 80 per cent of top line for the business behemoth, which delivered Rs 5,42,329
But the share of energy revenue has declined steadily from nearly 100 per cent in FY14.
Suddenly, the business house is looking at an
entirely different revenue composition
Its acquisitions are woven around this cohesive plan
While profits are rising steadily, it is transforming into a dominant, mass consumer-oriented franchise
It's only a matter of time before the market begins to give the stock a trading multiple of a new-age digital smart play, rather than an
Ambani declared he has exposure to the stock.
The RIL stock has been one of the dominant market movers over the past few months, hitting
fresh highs in recent weeks
However, some analysts caution that it is now an over-owned stock and any slowdown in earnings could be a damper for shareholders.
Analysts
Brookfield and monetising tower assets and mega fibre assets through a possible InvIT to global players will help raise significant
resources for future investments and to repay debt
As of December 31, 2018, it had a total outstanding debt of Rs 2,74,381 crore compared with Rs 2,18,763 crore as on March 31, 2018.
Dalal
Street is counting down to the moment when Ambani would eventually demerge its bread-and-butter energy interests from consumer
businesses.
Such a demerger is going to unlock value for shareholders, say analysts
As a first step in that direction, they have already transferred the asset to a trust
A demerger will give separate valuations to the high-growth business, which is the future, and the new stock can trade at a higher PE
RIL should be valued as an SOTP of these three businesses
December quarter, RIL surprised market with a record net profit of Rs 10,250 crore
considering the Jio volumes and prices amid huge data consumptions in the runup to the elections
hit Rs 1,550 in the medium term, and Rs 1,750 in next two years
our GRM assumptions to factor in softer margins in January-June 2019, which will lower refining Ebitda in FY19-20
However, this will be offset partly by an improved outlook for the organised retail business, leading to higher Ebitda estimates over
per cent earnings CAGR over FY18-21e
Further, its energy business continues to generate strong free cash flow whereas the growth outlook for consumer businesses, retail and
