Also, they clearly said that it is a part of Reliance 5G initiatives… maybe, the vision is a SuperApp like what Tatas are trying to do, which can offer bouquet of products and services
BTW, Reliance has a long-standing company called Reliance Life Sciences, which is into biotechnology. Recently they sought approvals for Covid vaccine trials too.
Its always better to invest in sunrise sectors and hedge your bets, because you never know what it may grow into. Case in point, is Tatas starting TCS way back in 1968 - who would have thought?? Also for reliance, they need to quickly do it, as oil and gas is a sunset industry and they need to replace this with equally big industry in 10-20 years
Can we expect this cash to generate even average returns in next 10 years. Ultimately it’s cold cash and profits that investors should expect. We don’t want bad subsidiaries eating cash of good subsidiaries and generating net zero/ negative profits. Diversification doesn’t always result in good returns.
Also, I am referring to all the recent investments, not just this one in particular.
All the recent ones are asset heavy (except JD which is B2B) and can only produce returns after some gestation period(if they do everything right).
The way I see it , its a perfect spawner in making , acquisition of tailwind sectors with high margin business, I do not care about dividend or buy backs as long as they are doing investments in future/next generation businesses, some of investment can fail, while some may turn out like Instagram for FB did, or YouTube for google did or Retail/Jio is happening for reliance.
Everyone diversifies, if retail investors do and when you are the biggest conglomerate of India, the diversification is more than necessary, it is what that drives the future growth as it opens new arenas.
When you are small, you tend to do things precisely because of various reasons and factors, you don’t want to fail as the resources are limited, and when you start growing you start to diversify, get a bit bold too, and when you have become a behemoth, you have to looking at opportunities even if they are not opportunities at the time of looking at them, you may see a tiny spark and want to turn it to a fire, they may turn out to be another feather in the cap or become a dud, but you have to have a long-term view, in Reliance’s case, longest term view, decades.
One has to be prepared for all of this as it is not one company that is into one business, it is India’s biggest conglomerate, a Fortune 500 company, and probably will remain so unless every new venture becomes an injured horse and drags the growth.
And here, the market is right, the collective wisdom coming from different groups of investors who know about their particular domain will exercise their control and reward if a particular investment is worthy.
Unlike ITC which fits the same bill but is rewarded differently, the market believes Reliance.
One point I think is missing in discussions is jio platform is aiming to build next gen technologies in India. Last year AGM they announced about jio glasses, a mixed reality glasses, but they have not followed it aggressively in public.
They acquired company called tesseract https://tesseract.in/, you might have heard about it in show called nayi soch in star network hosted by Shahrukh Khan.
Not only they are launching glasses but also they are building strong ecosystem of many ar apps and games in their play store, and this I thing the major reason google glasses failed in last decade. Glasses will be launched in beta phase this diwali in selected household in mumbai and bundled together with jio fiber offering.
One cons I see for the success of the device is it require smartphone with 8gb ram which significantly reduces the potential target user base. But this is only for beta trials where companies is past have asked for higher specifications.
Reliance is aiming to be at least be a leader in India in Hydrogen powered transportation. While it might not make too much sense (won’t go into too many details, lot of content on web, youtube and elon musk views) but they can and most probably will drive heavy vehicles. Range and sheer electricity demand in these vehicles doesn’t make sense for them. Although Tesla is coming out it’s battery operated trucks next year. So Never say Never.
Not just heavy vehicles but eVTOLs would also drive this industry’s infra demand so there is no doubt , future is not too far.
Nobody is trying to find out what exactly went wrong for the demerger to be called off? Everybody seems satisfied that “due to evolving nature of Reliance’s portfolio” the hive-off cannot go ahead. No questions asked, no more details required. I am not sure what really has changed between February and November with regards to nature of business portfolio.
Lot has happened since Nov 2020 and Nov 2021 . US president election is one the key event and aggressiveness of ESG investors against Oil companies like Shell , BP , Exxon forcing them not to invest into fossil fuels .
Today both RIL and BPCL deals faced same headwinds …
RIL needs to change itself to make itself more attractive esp for Energy vertical . Hence Hydrogen game is being worked out …
RIL + point is adaptability … It can mould itself fastest in line with investor community expectation …
Hope this adversity is blessing in disguise …
phone launch this friday on the auspicious occasion of Ganesh Chaturthi.
