RIL's big deal announcements: Here's what experts have to say
Deals and disruptions were the key highlights of Reliance Industries Limited’s (RIL) 42nd annual general meeting (AGM). Mergers and acquisitions (M&As) and alliances are part of RIL’s key strategy to bolster the consumer-facing businesses and also deleverage the balance sheet of the group.
There is a deal manifesting in each of the businesses of the company. Among the key highlights from the AGM, RIL announced the sale of 20 percent of its oil-to-chemicals business to Saudi Aramco for $15 billion of enterprise value. This business will be carved out as a separate business division.
After disrupting the telecom market, Jio will take its competitive edge to the fibre space as well with the launch on September 5 with 4K LED TV or set-top box on offer on certain plans.
In content, there is also a plan to provide movies first-day-first-show in the comfort of your living room. While all this is really tying in together, RIL also plans to get strategic or financial partners in both Jio as well as the retail businesses in the next few quarters. It also announced the listing of these companies in five years.
Putting together all the pieces of the announcements, it clearly looks like RIL will become a holding company (holdco) with oil and chemical, retail and telecom businesses as separate entities in about five years from now. It is a massive exercise and RIL plans to be a zero net debt company in the next 18 months with some of these deals manifesting by that time.
SP Tulsian, Rohan Dhamija of Analysys Mason and Naveen Mishra, senior director analyst of Gartner focused on some of these important announcements in a discussion with CNBC-TV18.
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