Reliance Industries AGM: Update on Jio listing, 5G roll-out among things to watch for

Mukesh Ambani’s Reliance Industries has scheduled its Annual General Meeting for August 29, and many expect announcements about share market listing of either Reliance Jio, Retail or O2C businesses along with the launch of 5G services. This year’s annual general meeting will be the 45th AGM of Reliance since its IPO (Initial Public Offering). Reliance Industries AGM is a much-awaited event with Mukesh Ambani often revealing what the oil-to-telecom conglomerate would do next to drive growth. Last year at the 44th AGM of Reliance had made a slew of announcements related to the solar and new energy business, along with the launch of the JioPhone Next.

JM Financial expects that at this year’s RIL AGM there could be an announcement of a timeline for the potential listing of its three key businesses of the company — Reliance Jio, Reliance Digital, and the oil to chemical unit (O2C). Many do expect Reliance Industries to come up with an IPO for Reliance Jio soon. Earlier this year, CLSA had projected that Jio’s IPO could be launched this year for an enterprise value of nearly $100 billion.

RIL’s energy business stake sale

Further, analysts expect an announcement on the potential strategic stake sale in O2C, Retail and New Energy business unit of Reliance Industries. The traditional cash cow of Reliance Industries — the O2C business unit could be partially sold, according to investors. Earlier last year, Mukesh Ambani and Saudi Aramco called off their deal to sell a 20% stake in the unit to the latter. Further, a stake sale in the fast-growing retail business or the new energy business has not been ruled out. Reliance Retail has grown rapidly over the years while the new energy unit is seen as the future growth engine for the firm.

Mukesh Ambani’s 5G offer

With 5G auctions over and Reliance Jio being the top bidder, expectations are that Mukesh Ambani’s firm could announce the launch of its 5G service at the 45th AGM this month. Earlier this month, Reliance Jio spent Rs 88,078 crore and acquired a total of 24.7 GHz of spectrum in the 700 MHz, 800 MHz, 1800 MHz, 3300 MHz, and 26 GHz bands. Telecom minister Ashwini Vaishnaw has also asked telcos to gear up for 5G launch.

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Reliance Industries stock rating: Buy; check target price, upside

JM Financial is bullish on Reliance Industries and has a buy call. “We reiterate BUY given RIL’s industry-leading capabilities across businesses and expectation of strong 14-15% EPS CAGR over the next 3-5 years,” they said while adding that the stock is trading at FY24E P/E of 25.3x (3-year avg: 22.0x) and FY24E EV/EBITDA of 12.8x (3-year avg: 12.6x). A target price of Rs 2,950 per share has been pinned.