Isha, Akash And Anant Ambani - Reliance's Next Gen To Drive Biz Juggernaut

If you’ve watched HBO’s TV show Succession you’d know what a great show it is and how hard succession planning can be for family-led conglomerates. 

Spoiler alert: It is about a succession plan and a fight for control of a company. 

While Reliance Industries Limited (RIL) saw a much public succession feud between brothers Mukesh and Anil Ambani after their father's passing in the early 2000s — as this newsletter had previously written about — Monday’s 46th Annual General Meeting of RIL indicated that it was giving its next generation an even bigger role to play. 

In a major announcement to the board of the company, Mukesh Ambani announced that his three children – Isha, Akash and Anant – would be joining the board while Nita Ambani would be stepping down from it. She would remain a permanent invitee though by virtue of her chairpersonship of Reliance Foundation, the company’s philanthropic arm. 

“Continuity with change is the signature tune of all dynamic organisations. This tune attains its highest creativity when continuity joyfully welcomes change and change respectfully learns from continuity. I assure you that the combination of the experience of senior leaders and the ambition of new leaders will script newer and more exciting chapters in Reliance’s ever-growing book of achievements,” Mukesh Ambani said. 

RIL is a multi-billion dollar Indian conglomerate with Asia’s richest man Mukesh Ambani at its helm. Mukesh Ambani announced that he will serve as chairperson of RIL for five more years. 

What Does This Mean?

In the grander scheme of things, this should not be a surprise as their ascension to the board follows their elevation to the head of Reliance’s engines. 

In 2022, Akash assumed the chairpersonship of telecommunications company Reliance Jio Infocomm Limited, which in this AGM reported an all-time high revenue of nearly Rs 1.2 lakh crore and an EBITDA exceeding Rs 50,000 crores. Consumer announcements also took a pedestal as the company unveiled a new feature phone for Rs 999 to wean legacy mobile users off yesteryear 2G technology. Mukesh Ambani announced a new 5G wireless router called Jio AirFibre, that will launch on September 19, and said the company would lead the way in developing 6G. 

A promise probably summarised the journey of Jio so far from a telecom to a tech player. “AI for everyone, everywhere,” resonates with the one they made seven years ago during their launch in 2016 on providing broadband via mobile to the masses. 

Isha became the chairperson of Reliance Retail in 2022. This arm of the company just posted a revenue of Rs 2.6 lakh crore, an EBITDA of Rs 17,928 crore and a net profit of Rs 9,181 crore. It is coming right off a hefty investment of $ 1 billion from the Qatar Investment Authority for a 1% stake last week. The last year saw the company expand by bringing in franchises of global marquee names, like 7-11 and Indian homegrown companies like Campa and Sosyo as part of its dedicated FMCG business.

Anant took over as head of the new energy business called Reliance New Energy Limited and in his father's words last year, “..spends most of his time in Jamnagar”, a city in Gujarat that houses the company’s and world’s largest oil refinery. The city is an insignia of the old-age business, but the company aims to make Jamnagar the seat as part of its new energy transition with the Dhirubhai Ambani Green Energy Giga Manufacturing Complex. 

Today, it was announced that the company would be instituting a new fully integrated and automated electrolyser manufacturing facility that will help its efforts towards its transition to manufacturing green hydrogen. In fact, the revamp of this city’s image from a hub of old energy to one that will power the future features so prominently in their plans that Ambani announced that the refinery would gradually operate as a ‘Chemicals and Materials Feedstock Production’ engine. 

The company also plans solar manufacturing facilities that would be able to convert sand into solar photovoltaic modules by 2025 and battery giga factories by 2026 as part of this transition. It also llooks to complement its portfolio with wind power generation worth 100 gigawatts by 2030 and look to integrate their wind and solar generational capabilities in Jamnagar to ensure round-the-clock power availability. They are also working on a carbon fibre plant in Hazira, again in Gujarat. 

What Else Was Announced?

RIL formally introduced its newest vertical – Jio Financial Services – that demerged from it in July. Its introductory participation in the AGM was grand as Ambani announced its foray into the insurance business and an announcement with giant BlackRock for an asset management company, including an address by its CEO Larry Fink. 

Jio Financial Services has also been fortified with a capital infusion of ₹1.2 lakh crore. 

“JFS will enter the insurance segment to offer simple, yet smart, Life, General, and Health insurance products through a seamless digital interface, potentially partnering with global players. It will use predictive data analytics to co-create contextual products with partners and cater to customer requirements in a truly unique way,” Mukesh Ambani said. 

Quite like its vision for energy and Jio, the new company aims to democratise finance for the masses. However, information on more of the companies offerings are yet to be announced. 

Shareholders, however, seemed to have greeted the company with a rocky welcome. 

At the onset, Ambani called the demerger a “mini-bonus” for long-term investors, but this has been eroded with a potential delisting of the company from various indices looming. 

Since its listing on August 21, the company slumped to its lower circuit four times. 

Even on Monday,  Jio Financial Services closed 2.1% lower at ₹210.10, losing nearly 15.5% since its listing in a week. 

Overall, Reliance’s stock has had a slow year, with data showing it is nearly at the same level as it was at this time last year. Surel thought, news of Jio Financials’ demerger gave it a temporary boost as it reached ₹2,841 this year on July 19. 

But Monday, it closed 1.27% lower at ₹2,436.95 on the National Stock Exchange.

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