(Bloomberg) -- Billionaire Mukesh Ambani unveiled ambitious plans for Reliance Industries Ltd. to develop cutting-edge artificial intelligence tools, but gave no details on the much-awaited listings of its telecom and retail units in his annual shareholders’ address.
The conglomerate wants to “democratize” AI by offering models and services to ordinary Indians at affordable prices, he said, giving no investment outlay in the marathon two-hour speech that mentioned AI more than 80 times.
The energy-to-entertainment conglomerate also plans to set up “gigawattscale AI-ready data centers” powered by green energy in Jamnagar in Gujarat — home for all of the group’s big businesses from oil refining to green energy, he added.
Asia’s richest person took the dais minutes after Reliance informed stock exchanges that its board will consider a bonus share issue for the first time in seven years next week — a sweetener for shareholders while they continue to await clarity on the initial public offerings of Reliance Jio Infocomm Ltd. and Reliance Retail Ltd.
Ambani’s focus on mega data centers will also pitch him against compatriot and Asia’s second-richest Gautam Adani, who’s doubling down too on this business.
Rewarding Shareholders
Shares closed 1.5% up at 3,041.85 rupees ($36.269), pushing this year’s advance to almost 18%. While the shares surged as much as 2.6% on Thursday after the unexpected bonus issue announcement that aims to reward shareholders, it pared some of those gains as Ambani’s speech was scant on details of listing its consumer-facing businesses.
The Reliance board will meet Sept. 5 to consider the bonus stock issue proposal.
Ambani, however, did outline ambitious growth plans for the conglomerate’s telecom and retail business — both sector leaders that lured more than $27 billion from marquee investors in 2020.
Silicon Valley giants Meta Platforms Inc. and Alphabet Inc.’s Google were among who invested into the telecom venture while investors including KKR & Co Inc., General Atlantic, Saudi Arabia’s Public Investment Fund and Abu Dhabi Investment Authority bought into its retail business.
Jio and Retail are “expected to double their revenues and Ebitda in the next three to four years,” he said, calling these business two of the five growth engines. Ebitda stands for earnings before interest, taxes, depreciation and amortization.
‘New Jewel’
“Today, three of these engines have a valuation of over $100 billion each,” Ambani said, without specifically naming the businesses. The tycoon also expects the green energy business to be the “new jewel in Reliance’s crown,” becoming as big and profitable over the next five to seven years as the traditional energy business.
Ambani’s daughter, Isha, who helms the retail business of the group, told shareholders that Reliance will partner Shein, marking the fast fashion giant’s return to India after four years.
Founded in China and headquartered in Singapore, Shein was among a slew of Chinese apps banned by New Delhi following deadly border skirmishes with China in 2020. The tie-up will help Reliance compete with rival Tata Group whose retail unit Trent Ltd. is outperforming Indian fashion rivals.
“The Reliance Group is well on track to more than double in size before the end of this decade and grow faster in the decades ahead,” chairman Ambani said.
Here are some of the other key announcements from Ambani’s speech:
- Production of solar photovoltaic modules will start by end of the year, followed by completion of the first phase of integrated facilities including modules, cells, glass, wafer, ingot, and polysilicon
- Company is building India’s first integrated carbon fiber plant at Hazira
- Started construction of a battery making facility with 30 gigawatt hour annual capacity at Jamnagar, production likely by the second half of 2025
- Jio users to get up to 100 gigabytes of free cloud storage, with more capacity offered at affordable prices. Jio AI-Cloud’s “Welcome offer” to start later this year
- Jio is developing a comprehensive suite of tools and platforms, called the Jio Brain, to help more accurately predict consumer needs
- Plans to partner global companies for AI solutions that will enable home automation as well as benefit farmers, teachers, health care professionals and small businesses
--With assistance from Rajesh Kumar Singh, Advait Palepu and Rakesh Sharma.
(Updates with details on other key announcements at the end.)
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