Mukesh Ambani's Quantum Leap

RELIANCE INDUSTRIES CHAIRMAN Mukesh Ambani, who took almost seven years to firm up his foray into telecom, is not letting go of any emerging business opportunity of scale. Though he waited for a decade to turn around the retail business, for new ones such as renewable energy and financial services, Ambani has instructed his teams to avoid negative cash flows, even at the beginning. In short, he is looking to draw maximum value out of RIL's mega capital expenditure programme of ₹3.5 lakh crore.

As wheels of change roll on in Reliance Industries (RIL), the patriarch is focusing on building new businesses — 5G, solar energy, financial services and FMCG — to expand his empire. The result of the last round of investments in telecom, retail and oil & gas has made RIL the most profitable company in India — it posted a net profit of ₹73,670 crore in FY23, an 11.3% increase year-on-year. Due to its financial performance, Mukesh Ambani has topped this year's Rich List with a net worth of ₹8.19 lakh crore.

For the next round of growth, Ambani has earmarked ₹2 lakh crore for 5G and ₹75,000 crore for building five renewable energy-focused Giga factories in Jamnagar, Gujarat. Another ₹75,000 crore will be spent on expanding petrochemical capacities by 2027. "Over the past two years, 98% of the company's capex has been funded by internally generated cash profits. This has helped us maintain a strong and conservative balance sheet and retain superior investment grade ratings," Ambani says in his latest letter to shareholders.

RIL's gross debt was at ₹3.14 lakh crore in March. It includes standalone gross debt of ₹2.16 lakh crore and balance in key subsidiaries, including Reliance Retail (₹46,644 crore), Reliance Jio (₹36,801 crore), Independent Media Trust Group (₹5,815 crore) and Reliance Sibur Elastomers (₹2,144 crore). After discounting cash and marketable securities, net debt stood at ₹1.26 lakh crore.

The company was able to deliver another year of performance both on operating and financial fronts, despite disruptions in trade flows and economic uncertainties, adds Ambani. "The impressive growth was well rounded and supported by all our business segments. Consumer businesses continued their growth trajectory with a rapid expansion of retail store footprint and strong subscriber acquisition in Jio." Reliance Jio is the country's largest telecom operator with 442 million subscribers. On the other hand, Reliance Retail has 11 lakh sq. ft. of retail space in 18,446 stores across the country.

What Next?

Ambani, a chemical engineer by profession, has a record of building greenfield assets on ground. In late '90s, he led the creation of India's first private refinery in Jamnagar. Now, RIL has five Giga factories in the works, which can create infrastructure capacity to generate 100GW of power from solar energy.

Ambani has also set RIL a target to turn net carbon zero by 2035. "Accordingly, the development of Giga factories at the Dhirubhai Ambani Green Energy Giga Complex at Jamnagar is progressing rapidly…. The transition from traditional fossil fuels to renewable energy sources is going to be a crucial milestone in our history," says Ambani. The Giga factories will include an integrated solar photovoltaic module factory, an advanced energy storage battery factory, an electrolyser factory, a fuel cell factory, and a power electronics factory.

To keep ahead of the curve in 5G, Reliance Jio has cornered nearly half of the airwaves sold, at an estimated ₹88,078 crore, in India's biggest-ever auction of 5G spectrum in July 2022. "Jio is on track to complete pan-India 5G rollout before December 2023. The new JioBharat phone is another innovation by Jio combining network and device capabilities to help accelerate '2G-MUKT BHARAT' vision and democratise the Internet," says Akash Ambani, chairman, Reliance Jio Infocomm, at the latest earnings call.

Recently, RIL has demerged the financial services arm into a separate listed entity and named it Jio Financial Services Ltd (JFS). "The digital revolution has penetrated every corner of the nation through Jan Dhan Accounts, digital payments, usage of smartphones and low-cost data. The growth opportunities presented by financial services are remarkable and provide a strong directional support to the economy," says Mukesh Ambani in RIL's latest annual report. JFS recently formed a joint venture with US-based investment giant BlackRock to create an asset management business.

Another new business is Reliance Consumer Products Ltd., which was created in November last year. Ambani's daughter Isha is in charge of the business. The FMCG arm has launched products in categories such as home essentials and home care, food and beverages, confectionery and personal grooming. It also re-launched the iconic Campa Cola brand, after acquiring it from Pure Drinks Group, besides buying out Lotus Chocolate, along with sub-brands Chuckles, On & On, Milky Punch and Tango, and beverage brand Sosyo.

Private Wealth

The Ambani family owns the world's most expensive private residential home, Antilia, in Mumbai, besides private jets and super cars. In 2021, RIL bought Britain's iconic country club and luxury golf resort, Stoke Park, for an estimated ₹592 crore. The family has also built the iconic Nita Mukesh Ambani Cultural Centre in Mumbai on the lines of the Metropolitan Museum of Art in New York.

India's richest businessman is now preparing his three children — Isha, Akash and Anant — to lead the group’s major businesses. There is also a battery of leaders inside the company to assist them in driving growth. The new businesses will give enough room for the next generation to execute their ideas, say insiders.