The world according to Mukeshbhai

India's largest company held its annual general meeting on Wednesday. One edition of The Paper may not be sufficient to cover all its implications.

Annual General Meetings are generally reputed to be dour affairs, held more for statutory reasons than to really add value. Company financials are read out, speeches made by the CEOs and CFOs, and certain resolutions (including election and re-election of board members) are put to vote.

Barring exceptional circumstances, these votes sail through. There is a question and answer session where enthusiastic retail investors ask some questions to the board, but then again there is nothing interesting to write home about.

One company, however, has made it a habit of turning its AGM into a pageant. Apple has its annual World Wide Developer Conference where it announces important updates to its hardware and software. Google has its Google I/O event for announcing cool stuff. Reliance India Limited (RIL), India’s largest company by market capitalisation, doesn’t need any special event to announce the cool stuff it wants to do. It simply uses its AGMs for the purpose.

So far, all the post-IPO AGMs of Reliance have been physical meetings that have often been equated with big fat Indian weddings.

The company that is widely credited with having launched the equity culture in India, held AGMs in stadiums during times of its founder Dhirubhai Ambani.

In 1985, 12,000 of them attended the Reliance AGM at the Cooperage Football Ground in Mumbai’s Colaba. The next year, around 35,000 attended it at the city’s Cross Maidan.

Over the years, the AGMs got shifted to auditoriums even as its shareholder base swelled to over 24 lakh.

So RIL held its AGM on Wednesday. Thanks to the pandemic, it was held through videoconference, using the JioMeet platform. Yes, the same one where Jio has been accused of copying Zoom. The use of JioMeet for the AGM possibly explains why the product had been announced before the AGM.

More significantly in the light of recent rumours, the AGM was webcast on YouTube. As expected, the event was also webcast live on Facebook Live.

Much was expected of the AGM thanks to the slew of investments that Jio, RIL’s subsidiary, has gathered over the last few months. As we have been saying, Jio Platform is a platform for private equity firms to get together, and also possibly a platform for large tech companies to collaborate.

Tech and Financial Investors get different rates

Google’s investment in Jio Platforms was confirmed in the AGM. Google is putting in $4.5 billion (more than the $4 billion rumoured earlier) into Jio Platforms for a 7.7% stake. This values Jio Platforms at $58.4 billion. Remember that in April, Facebook had invested $5.7 billion for a 9.99% stake (valuation of $57 billion).

The valuation is interesting, for the slew of financial investors that Jio gathered between the Facebook and Google deals all invested at a higher valuation (around $64 billion). Hardware company-backed funds that have invested in Jio Platforms such as Qualcomm Ventures and Intel Capital also invested at the higher valuation ($64 billion).

Mint reports that with both Google, Intel and Qualcomm all investing in Jio, the company now has the right pieces in place to build a customised phone. Jio has already built a 4G-enabled feature phone that runs on an operating system called KaiOS.

Speaking of building new technology,

Reliance Jio has designed and developed a complete 5G solution from scratch. It will be ready for trials as soon as the 5G spectrum is available and can be ready for field deployment next year. The announcement was made by Mukesh Ambani at the company’s 43rd annual general meeting (AGM).

“Jio has created a complete 5G solution from scratch, that will enable us to launch a world-class 5G service in India, using 100 per cent homegrown technologies and solutions,” Ambani said during the company’s 43rd annual general meeting (AGM).

5G spectrum in India is likely to be auctioned next year. The interesting thing is that the 5G technology developed by Jio is not just for itself - it is also going to be offered to other networks.

Reliance said Jio had developed its own 5G technology and plans to offer it to other telecom companies, a move that will pit it against the likes of Nokia, Ericsson, Huawei and Samsung, in what analysts said was the first such initiative by a mobile phone operator. Reliance Industries Ltd (RIL) said Wednesday that its telecom unit had created a complete 5G solution, using 100% homegrown technologies that will allow it to launch next-generation, high-speed services in India.

With India looking to keep Huawei and ZTE out following hostilities on the border with China, dependence on the other overseas suppliers would have increased costs, analysts said.

In other words, apart from being a mobile operator, Jio also wants to be a tech company. It will be interesting to see if SoftBank invests in it at some point in time! Meanwhile, here is a summary of what the 5G technology entails, from Qualcomm’s website.

Jio aims to hit 500 million subscribers in the next one year, up from its current 400 million, Ambani confirmed during the meeting. In another interesting statement, he spoke about “making India 2G free” by bringing in affordable 2G phones. The above link and the following quote are from News18, which is owned by RIL.

Reliance Jio is also focusing on pushing for the adoption of affordable 5G smartphones in India, as it envisions a 2G-Mukt Bharat with all 2G users upgrading to a faster 4G or 5G mobile data experience.

“2G-Mukt” (translates to “2G Free”) is an interesting, and possibly political statement. When Prime Minister Narendra Modi came to power in 2014, he promised a “Congress mukt Bharat” (Bharat is an alternate name for India). Congress refers to the Indian National Congress, now the principal opposition party, but which was in power between 2004 and 2014.

The downfall of the Congress’s last term in power came with what has now been come to be known as “2G scam” (where 2G spectrum was given away to operators at throwaway prices on a first come first served basis). So with 2G being associated with Congress, and the Prime Minister wanting “Congress mukt Bharat” and RIL wanting “2G Mukt Bharat”, you can draw your own gossipy conclusions.

What about the rest of Reliance?

Moving on from Jio, Ambani gave strong indications during the AGM that he has started lining up investors for his retail venture Reliance Retail.

“We’ve received strong interest from strategic and financial investors in Reliance Retail,” Ambani told the 300,000-plus people who logged into the virtual conference from 41 countries. “We will induct global partners and investors in Reliance Retail in the next few quarters.” 


Reliance Retail, which runs supermarkets, India’s largest consumer electronics chain store, a cash and carry wholesaler, fast-fashion outlets and an online grocery store called JioMart, reported 1.63 trillion rupees ($22 billion) in revenue in the year through March 2020. The unit operates almost 12,000 stores in nearly 7,000 towns. 

Remember that Reliance Retail is already rumoured to be buying out Future Group. That will need capital. Also, with Jio aggressively pushing JioMart for grocery, which puts it directly in competition with Amazon and Walmart. That will need capital as well.

“Jio Platforms not only has the backend infrastructure and development capabilities but also an ever expanding captive consumer base,” said Mayank Vishnoi of Singapore-based financial advisory firm Resfeber International. 

“The addition of new digital products targeting various sectors will pose threats to many large dominant players. Having strategic partners like Facebook and Google validates that Reliance gameplan is real.” 

The recent stake sales gave Reliance a foreign partner for JioMart, which was launched this year. Facebook’s WhatsApp, which counts India as its top market with 400 million plus users, will work closely in connecting small retailers to JioMart. 

Speaking of Amazon, this tweet might capture the essence of it being excluded from the latest “platform for tech companies”.

Elsewhere (we continue with RIL. Just that its AGM was so exhaustive)

RIL has been approached by global strategic investors for its petrochemicals business. However, this doesn’t include Saudi Aramco.

“Last year, I shared with you the basis of equity investment by Saudi Aramco in our oil to chemical business. Due to unforeseen circumstances in the energy market and the covid-19 situation, the deal has not progressed as per the original timeline. Our equity requirements have already been met," Mukesh Ambani said in the annual general meeting.

That led to RIL’s share price tanking on Wednesday, despite all the other spectacular announcements at the AGM (including Reliance becoming net debt free, eight months ahead of schedule).

This wasn’t mentioned in the AGM, but RIL has expanded its partnership with BP, launching a new company called Reliance BP Mobility Limited. BP has contributed $1 billion for a 49% stake.

Reliance is getting into Mixed Reality, launching Jio Glass. Maybe Google’s expertise will come in useful in this case?

Jio is also getting into digital health services.

Finally, here is a good summary of all the announcements made at the AGM. You can read it for “revision”.