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Reliance AGM 2022 - TMB Takeaways · The Morning Brief

• 0:01
  Speaker 1: this is the morning brief from the Economic Times
• 0:12
  Speaker 1: for a company that started the equity cult in India.
• 0:15
  Speaker 1: Its annual general meeting with shareholders has always been an
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  Speaker 1: event as large as its operations,
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  Speaker 1: always a family affair.
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  Speaker 1: It is
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  Speaker 1: his vision by rabbis vision and values that have guided
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  Speaker 1: us in this magnificent journey of reliance
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  Speaker 1: where every member of the family plays a critical role
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  Speaker 1: from the adults to even the gen. Next
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  Speaker 1: good afternoon everyone, I am Isha Ambani and I am
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  Speaker 1: always dramatic with even some of the top global c
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  Speaker 1: E o. S making cameos
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  Speaker 1: we have with us a special guest, the ceo of
• 1:05
  Speaker 1: google indian icon Sundar Pichai
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  Speaker 1: I have with me today the Ceo of qualcomm mr
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  Speaker 1: Christiano Amon
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  Speaker 1: I am delighted to welcome Yasser al Romanian, chairman of
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  Speaker 1: Saudi Aramco.
• 1:25
  Speaker 1: A trip down the memory lane nostalgic sometimes high with
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  Speaker 1: melodrama and value systems for the 1st 25 years. I
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  Speaker 1: sat by the side of my father who tutored me
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  Speaker 1: with boundless affection attention and hope I can feel as
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  Speaker 1: if he is sitting here smiling and talking to me
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  Speaker 1: and to all of you
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  Speaker 1: and of late a platform to make mega announcements. A
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  Speaker 1: GMS have never been so high voltage for any indian
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  Speaker 1: corporate it's thursday four september from the Economic times, I
• 2:02
  Speaker 1: am your host Kalpana Pathak and you are listening to
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  Speaker 1: reliance a GM 2022 the morning brief takeaways.
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  Speaker 1: In this episode we asked three of our colleagues tanker,
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  Speaker 1: mukherjee Kalyan Parbat and origin barman, what's their key imports
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  Speaker 1: from the ADM announcements for the three main verticals, retail
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  Speaker 1: telecom and energy.
• 2:30
  Speaker 1: The tankers it is in house, expert on retail. Welcome
• 2:33
  Speaker 1: to the morning brief. What does Israel's announcement about expanding
• 2:37
  Speaker 1: into the Fmc G segment mean for the company and
• 2:40
  Speaker 1: the sector. So
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  Speaker 2: Reliance has been trying to expand the retail business beyond
• 2:45
  Speaker 2: the core area of organized retail. They have been telling
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  Speaker 2: us that organized retail is just 8-10% of the Indian
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  Speaker 2: retail market and they have that much space to grow.
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  Speaker 2: Whereas if they can
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  Speaker 2: enter into the wholesale business or eventually F. M. C. G.
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  Speaker 2: That would be a much bigger part of the market.
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  Speaker 2: So as you know, they have already tried to make
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  Speaker 2: an entry into the wholesale segment and they've already started
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  Speaker 2: with Tirana's and also for electronics and apparel so that by,
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  Speaker 2: they have already done in the last two years and
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  Speaker 2: F M C G is going to be the focus
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  Speaker 2: area now. So they would initially sell through their own
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  Speaker 2: stores
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  Speaker 2: And also they have around 15 Lakh Tirana's into the
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  Speaker 2: network right now who source products from their network. So
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  Speaker 2: they would return to them and eventually they would have
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  Speaker 2: a proper distribution set up, reaching out to multiple Tirana's
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  Speaker 2: but that is still work in progress. So it's basically
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  Speaker 2: a strategy to scale up the retail business and maybe
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  Speaker 2: have a larger party of the market than just organized retail.
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  Speaker 2: So
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  Speaker 1: what is reliance, retail's market share right now
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  Speaker 2: going by the revenue? They are no doubt the largest
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  Speaker 2: and the nearest competitor would be D. Mark, which is
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  Speaker 2: Avinu supermarkets, there would be around one third the size
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  Speaker 2: of a rail in the core retail business. So they
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  Speaker 2: are three times bigger than the nearest competitor. And the
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  Speaker 2: rest of the companies are much, much smaller in terms
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  Speaker 2: of revenue,
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  Speaker 2: profit.
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  Speaker 1: And what does reliance, retail's FmC expansion mean for the
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  Speaker 1: end of the world
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  Speaker 2: now getting into F. M. C. G. And competition with
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  Speaker 2: your preference cD players like or portrait consumer would be
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  Speaker 2: too far fetched to compare right now because he is
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  Speaker 2: a very different business. It requires a distribution network, it
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  Speaker 2: requires understanding
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  Speaker 2: consumer behavior as well as investments in marketing and brand building.
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  Speaker 2: So it's a long term play as we know that
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  Speaker 2: EITC has tried to do that in the last 10,
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  Speaker 2: 15 years and they are just still now just 50,000
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  Speaker 2: crore company FMc G far behind the target to reach
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  Speaker 2: one lakh crore revenue by 2030.
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  Speaker 2: Even if the pandemic was not the, I think that
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  Speaker 2: was an ambitious target. So it's a very different ballgame.
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  Speaker 2: There are already players like hulu which are here for
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  Speaker 2: lots of years, nestle and all these companies have a
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  Speaker 2: far deeper distribution system and these distributors are very loyal.
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  Speaker 2: So they're unlikely to change brands. So we should not
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  Speaker 2: compare their city play with some of these large brands.
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  Speaker 2: I mean the reliance is obviously going to be aggressive,
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  Speaker 2: but it's a different Ballgame.
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  Speaker 1: So what do you think would be a real strategy
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  Speaker 1: for the FMC G space given its formidable private labels presence.
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  Speaker 2: So what we understand from the management is that they
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  Speaker 2: have a private level presence which they would take out
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  Speaker 2: to the open market to Tirana's and that apart, they
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  Speaker 2: are looking at multiple accusations which would be a local
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  Speaker 2: regional brands or brands which were popular at one time
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  Speaker 2: and now has probably died or not that relevant.
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  Speaker 2: They have tried that in electronics. They have license to
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  Speaker 2: brands which were very popular at one time. Bpl and illuminator.
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  Speaker 2: It's their own licensed brand and they have relaunched the
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  Speaker 2: brands with a lot of new products and they have
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  Speaker 2: been quite successful and now they've also started selling those
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  Speaker 2: in other electronics stores. So they have tried and tested
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  Speaker 2: that model and they're going to replicate that in the
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  Speaker 2: city as well. What we understand is that they are
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  Speaker 2: already negotiate
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  Speaker 2: Station with two dozen such local and regional brands and
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  Speaker 2: they have already signed the deal with at least three
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  Speaker 2: of them including one of the legendary King Brand Tampa
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  Speaker 2: or camp popular to remember in the 70s. And so
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  Speaker 2: they've already signed that brand that they have acquired the
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  Speaker 2: brand and they will be launching the brand and they're
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  Speaker 2: in negotiation with multiple such brands. So they,
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  Speaker 2: That's a strategy, they would look at apart from taking
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  Speaker 2: their own private levels which are doing reasonably good in
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  Speaker 2: their own stores, accounting for 20-30% of category says be
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  Speaker 2: your groceries, your soaps or shampoo or even your grooming products.
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  Speaker 2: So it will be interesting to see how they do it.
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  Speaker 2: But again
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  Speaker 2: whether a consumer would prefer luck, soap or soap reliance,
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  Speaker 2: that's something we need to watch out for unless they
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  Speaker 2: acquire soap which is popular in the market and which
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  Speaker 2: consumers are aware of. So it will take some time
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  Speaker 2: till they build a proper portfolio and take it to
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  Speaker 2: the market. So it won't be just private level. But
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  Speaker 2: even third party brands and that would be very critical
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  Speaker 2: for their success.
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  Speaker 1: Mr Ambani told shareholders that he will share an update
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  Speaker 1: on the planned I. P. O. Of reliance retail. NGO
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  Speaker 1: in the annual general meeting next year. How do you
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  Speaker 1: think these strategies will strengthen reliance retail when it hits
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  Speaker 1: the market for an I. P. O. In future?
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  Speaker 2: So these strategies of whether it's the B. Two B
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  Speaker 2: retail which they're looking at which they call new commerce
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  Speaker 2: or F. M. C. G. Will be vital because that
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  Speaker 2: will add scale to the company. So we know that
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  Speaker 2: the new commerce and E commerce as in both B
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  Speaker 2: two B and B. Two C. Commerce together accounts for
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  Speaker 2: around 20% of the revenue and this is just in
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  Speaker 2: 1.5 years. So FM CD will again play a role
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  Speaker 2: in scaling up but FM CD,
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  Speaker 2: it's also a business where you need to do a
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  Speaker 2: lot of category investment in the beginning so a lot
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  Speaker 2: of money is required for investment that impacts your margins.
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  Speaker 2: So it would be interesting thing how they balance the
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  Speaker 2: margin play whereas trying to get a higher share of
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  Speaker 2: the top line but they might be postponing it for
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  Speaker 2: one or two years just to ensure that the scale
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  Speaker 2: of the business increases much more with both the F. M. C. G.
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  Speaker 2: And new commerce or holes elastic quality.
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  Speaker 1: Another Corgan reliance's growth wheel is reliance to you which
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  Speaker 1: is betting big on the five G. Segment
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  Speaker 1: reliance will invest rupees two lakh crore NGO by 2025
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  Speaker 1: deploy the latest version of five G. Called standalone five G.
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  Speaker 1: Kalyan par. But who has been tracking telecom for two
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  Speaker 1: decades tells us how important is five G. And standalone
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  Speaker 1: five G. Four alliance,
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  Speaker 1: Killian, welcome to the morning brief pleasure pleasure. If you
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  Speaker 1: could help me understand why is Geo betting so big
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  Speaker 1: on five G. So basically the industry is down to
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  Speaker 1: essentially two strong players and one
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  Speaker 1: week struggling telco the opportunities are enormous. The use cases
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  Speaker 1: are just starting to develop the handset ecosystem for five G.
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  Speaker 1: Is also developing pretty rapidly so it's a perfect time
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  Speaker 1: to get into five G to you know launch networks
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  Speaker 1: and make the most of the use cases and the
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  Speaker 1: ecosystem that's evolving and Geo as
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  Speaker 1: the undisputed telecom market leader with an over 40% revenue
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  Speaker 1: market share with a country wide arsenal of over 400,000,004
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  Speaker 1: G customers is just perfectly geared to take the plunge
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  Speaker 1: and further consolidate its, you know, mobile broadband play.
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  Speaker 1: Could you help us understand what is a standalone launch
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  Speaker 1: and what is the difference between stand alone versus a
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  Speaker 1: non stand alone In this case, a standalone five G
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  Speaker 1: network is one that purely runs that is not dependent
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  Speaker 1: on existing four G network infrastructure
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  Speaker 1: or spectrum or any of that. It is a network
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  Speaker 1: which is totally dedicated to five G mobile broadband communications.
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  Speaker 1: So that's what a standalone network is. But as a
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  Speaker 1: non standalone network typically writes on existing four G infrastructure
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  Speaker 1: and spectrum and uses some five G airwaves as a
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  Speaker 1: combination as an add on to generate the kind of
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  Speaker 1: five G like speeds on a basic five G infrastructure.
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  Speaker 1: So that's what non standalone is
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  Speaker 1: and world wide majority of the five G action that
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  Speaker 1: you're seeing currently is on through the non standalone mode
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  Speaker 1: which is popularly known as N. S. A. In the sense,
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  Speaker 1: over 90% of the five G traffic that you have
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  Speaker 1: worldwide is all passing through non standalone five G networks.
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  Speaker 1: So that way stand alone is still in its infancy
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  Speaker 1: and will take some time to really catch on. Although
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  Speaker 1: it is reckoned to be a superior form of five G.
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  Speaker 1: And how will it be a standout feature for Alliance
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  Speaker 1: to you? They are the guys who have invested in
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  Speaker 1: a pan India 700 megahertz spectrum which they're planning to
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  Speaker 1: use purely for their standalone net five G network Geo
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  Speaker 1: is of the view that with 700 pan India spectrum
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  Speaker 1: they would be able to offer a real
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  Speaker 1: five G kind of an experience speeds superior in building coverage,
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  Speaker 1: superior coverage and rural areas which would typically, and since
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  Speaker 1: you would require a fewer number of towers in rural
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  Speaker 1: India to rollout of five G networks which would be effective,
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  Speaker 1: you know, from a cost perspective
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  Speaker 1: And on top of that they've got Pan India 700.
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  Speaker 1: So they are in a position to do what they
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  Speaker 1: call carrier aggregation, which is you know, they can combine
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  Speaker 1: all the airwaves, the disparate airwave brands that they have
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  Speaker 1: to offer a cocktail, a unified, you know, high octane
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  Speaker 1: data highway offering.
• 12:26
  Speaker 1: It is important to mention here that when reliance announced
• 12:30
  Speaker 1: its intent to venture into telecom, the industry was skeptical.
• 12:35
  Speaker 1: After four years of scrapping the non compete agreement with
• 12:37
  Speaker 1: his younger brother, Anil Mukesh Ambani in 2014 founded the
• 12:41
  Speaker 1: telecom startup reliance to you
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  Speaker 1: JIA launch services into September 2016 and within a year
• 12:48
  Speaker 1: had 100 million paying customers.
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  Speaker 1: Ambani told the shareholders that Geo has broken one world
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  Speaker 1: record after another and proved the skeptics wrong
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  Speaker 1: Colin Do you see a similar script being played out
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  Speaker 1: with reliance is 5G bet here
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  Speaker 1: will s a help Geo gain more market share. And
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  Speaker 1: what about competition?
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  Speaker 1: Clearly essay is expected to be a superior form of
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  Speaker 1: five G which will allow Geo to offer real low
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  Speaker 1: latency applications particularly and very strong in building coverage in
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  Speaker 1: urban zones, which would obviously
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  Speaker 1: give any telco ahead, started acquiring top end customers because
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  Speaker 1: if you can offer superior broadband coverage in building broadband
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  Speaker 1: coverage inside buildings, intensely populated zones, that is a huge,
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  Speaker 1: you know, driver for market share expansion.
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  Speaker 1: So when Mr Ambani says that five G, standalone is
• 13:46
  Speaker 1: the best. Do we have the handset ecosystem to match
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  Speaker 1: that or is there a disconnect there? It's not going
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  Speaker 1: to happen overnight. The devices ecosystem around 700 is still
• 13:56
  Speaker 1: developing the handset ecosystem does not exist as of now. Yeah,
• 14:02
  Speaker 1: if the devices ecosystem, you know, sort of matures it
• 14:06
  Speaker 1: would be if it evolves rapidly standalone, you on the
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  Speaker 1: 700 band can become a very powerful value proposition in
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  Speaker 1: the five G sweepstakes, can you give me some color
• 14:18
  Speaker 1: on what is the competition doing with regard to five
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  Speaker 1: G and what is the Geo X factor? The Geo
• 14:25
  Speaker 1: is typically looking at using a standalone network to do
• 14:30
  Speaker 1: machine to machine communications
• 14:31
  Speaker 1: network slicing metaverse metaverse as you know, is going to
• 14:36
  Speaker 1: be the new age business and a virtual world, which
• 14:38
  Speaker 1: is going to be driven by five G technologies such
• 14:41
  Speaker 1: as augmented reality virtual reality Blockchain and
• 14:46
  Speaker 1: insofar as what competition is doing. Airtel has announced, Pan
• 14:50
  Speaker 1: India plans, the first wave of launches will happen in
• 14:52
  Speaker 1: october and the pan India launch is expected by March
• 14:56
  Speaker 1: but I would say a little is keeping the faith
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  Speaker 1: on the N. S. A non standalone mode because that
• 15:01
  Speaker 1: is the one which is more evil
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  Speaker 1: globally with over 90% of worldwide five G traffic running
• 15:06
  Speaker 1: on such networks, it'll is also convinced that S a
• 15:10
  Speaker 1: five G architecture would be more cost efficient. It would
• 15:14
  Speaker 1: it would, you know, typically offer the advantages of sweating,
• 15:17
  Speaker 1: it's four G assets better.
• 15:19
  Speaker 1: It would also leverage a more globally established network of
• 15:24
  Speaker 1: gear makers to be the early bird in the five
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  Speaker 1: G space because you have the benefit of the ecosystem
• 15:30
  Speaker 1: unlike a 700 system which is still to mature from
• 15:35
  Speaker 1: a handset ecosystem perspective. But you know, the Geo has
• 15:39
  Speaker 1: always been a disruptor and there are very strong parallels
• 15:43
  Speaker 1: with their four G entry. If you remember when they
• 15:47
  Speaker 1: came in with four G in 2016,
• 15:50
  Speaker 1: older players like to tell than the standalone vodafone idea
• 15:54
  Speaker 1: and standalone idea cellular, they were all doing two G
• 15:57
  Speaker 1: and three G. But Geo went ahead and came in
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  Speaker 1: with a parent of four G network, they came out
• 16:04
  Speaker 1: with a completely different technology
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  Speaker 1: and regardless of the fact that there were over 300
• 16:09
  Speaker 1: to 400,000,002 G users at that point of time. So
• 16:12
  Speaker 1: they didn't really care. So they took a very contrarian stance.
• 16:16
  Speaker 1: Now we see similar parallels emanating this time round two,
• 16:20
  Speaker 1: they're coming out with a standalone five G network, they're
• 16:23
  Speaker 1: betting big on a standalone five G network. So, so
• 16:26
  Speaker 1: which is why they are betting on a technology of
• 16:30
  Speaker 1: the future.
• 16:31
  Speaker 1: They have a very integrated, holistic 5G game plan. So
• 16:35
  Speaker 1: obviously it's totally thought out.
• 16:38
  Speaker 1: Mr Ambani mentioned private networks in the speech and that's
• 16:41
  Speaker 1: where Adani is also making plans to take players to
• 16:45
  Speaker 1: warn the same so will stand alone fight. She gives
• 16:47
  Speaker 1: you an edge in this particular segment.
• 16:50
  Speaker 1: Yeah, so definitely private networks, smart factories is going to
• 16:54
  Speaker 1: be a huge use case one standalone networks truly evolve
• 16:58
  Speaker 1: and the ecosystem matures. So like I said, all these
• 17:02
  Speaker 1: things including machine to machine communications or driverless cars within
• 17:07
  Speaker 1: complexes like ports, which Adani is typically looking at all
• 17:10
  Speaker 1: these things
• 17:11
  Speaker 1: would become very realistic use case once the ecosystems around
• 17:17
  Speaker 1: standalone five G matures, that is like I said, that
• 17:20
  Speaker 1: is still some distance away. Right point taken Geo has
• 17:24
  Speaker 1: taken digital mandate to the villages no doubt. But what
• 17:27
  Speaker 1: about the Archos to sustain one's five reinvestments? That's a
• 17:31
  Speaker 1: great question.
• 17:33
  Speaker 1: In fact Geo is putting in two lakh crores and
• 17:36
  Speaker 1: that's what Mukesh Ambani reliance Chairman announced. Now Goldman Sachs
• 17:40
  Speaker 1: has apparently said that G. O. Will need to boost
• 17:44
  Speaker 1: its annual operating income and revenue to the extent of
• 17:49
  Speaker 1: 32,000 crores and 50,000 crores to generate double digit returns
• 17:55
  Speaker 1: post tax. So now that's not going to be a
• 17:57
  Speaker 1: very that's not gonna be a cakewalk right?
• 18:00
  Speaker 1: And Goldman Sachs also estimates that Geo would need to
• 18:03
  Speaker 1: boost its monthly are produced by at least another ₹100
• 18:07
  Speaker 1: a month. They need to rise from 176 to 276.
• 18:12
  Speaker 1: Geo will be facing a tough opponent in Airtel which
• 18:17
  Speaker 1: has a strong balance sheet with a low leverage ratio.
• 18:20
  Speaker 1: So tell Geo actually increases the who cross subsidizes the
• 18:26
  Speaker 1: clearly one of the biggest challenges for G. O. Is
• 18:30
  Speaker 1: going to be to monetize to generate double digit returns
• 18:34
  Speaker 1: on its two lakh crore five G. Investment worldwide. Five
• 18:39
  Speaker 1: G mobile hasn't really generated meaningful, incremental our booze for
• 18:44
  Speaker 1: telcos telcos around the world are banking on enterprise solutions.
• 18:49
  Speaker 1: So I don't see very dramatic our poo
• 18:54
  Speaker 1: you know, growth in the near term happening my senses
• 18:59
  Speaker 1: unless the five G. Enterprise revenues turn meaningful. All the
• 19:04
  Speaker 1: telcos are gonna be looking out for regular opportunities to
• 19:08
  Speaker 1: hike mobile, five G. Mobile broadband tariffs so consumers like
• 19:13
  Speaker 1: you and I will end up paying more to you
• 19:16
  Speaker 1: know generate the our purpose for the telcos
• 19:20
  Speaker 1: as part of reliance's pivot from fossil fuels to new energy.
• 19:24
  Speaker 1: Last june the company decided to spend rupees 75,000 crore
• 19:28
  Speaker 1: in setting up four giant factories in the renewable energy
• 19:31
  Speaker 1: segment
• 19:33
  Speaker 1: This year, it committed another through P 75,000 crore and petrochemicals.
• 19:39
  Speaker 1: What does it mean for the company? Let us hear
• 19:42
  Speaker 1: from origin.
• 19:44
  Speaker 1: Welcome to the morning brief.
• 19:46
  Speaker 1: Let me begin by asking you, how do you see
• 19:49
  Speaker 1: this year's announcements on the energy front?
• 19:57
  Speaker 1: Good morning. Thank you for having me. Well this year's
• 20:02
  Speaker 1: announcements on new energy, I would say where merely top
• 20:06
  Speaker 1: ups the foundation has already been laid or was late
• 20:09
  Speaker 1: last year.
• 20:10
  Speaker 1: So these would be, you know, the additional toppings to
• 20:14
  Speaker 1: a pizza. So there is one more gigafactory now for
• 20:18
  Speaker 1: power electronics clearly to offset the overwhelming influence of china
• 20:24
  Speaker 1: in the global supply chain. So one more gigafactory. In
• 20:28
  Speaker 1: addition to the four giga factories. The management also came
• 20:32
  Speaker 1: Up with some timelines such as production of battery packs
• 20:36
  Speaker 1: by 2023 and up to 50 gigawatt per our capacity
• 20:43
  Speaker 1: by 2027 Stiff timelines. But now we have more clarity
• 20:48
  Speaker 1: that the clock is really ticking and ticking fast. Finally,
• 20:52
  Speaker 1: they also made an announcement, which I would say.
• 20:54
  Speaker 1: again more of a top up that the commencement at
• 20:58
  Speaker 1: the beginning of the transition from gray to green hydrogen,
• 21:02
  Speaker 1: which is gray means hydrogen, which is comes out of
• 21:06
  Speaker 1: Lng or gas to green hydrogen which is hydrogen which
• 21:11
  Speaker 1: is fired from renewable sources that will begin by 2025.
• 21:16
  Speaker 1: So all in all I would say more incremental
• 21:20
  Speaker 1: How do you see Ariel's new energy push versus peers
• 21:24
  Speaker 1: and especially when Ariel is talking about a manufacturing ecosystem
• 21:29
  Speaker 1: being in place. That's the difference you yourself said it
• 21:32
  Speaker 1: that so far in India most of the renewable companies
• 21:38
  Speaker 1: have been, I Peeps or independent power producers look at renew.
• 21:42
  Speaker 1: Look at green co look at even Adani first
• 21:45
  Speaker 1: Bush was to generate solar or wind power. Now here
• 21:50
  Speaker 1: was reliant that was actually talking about manufacturing now I
• 21:55
  Speaker 1: would guess. And they haven't openly said that the reason
• 21:59
  Speaker 1: why they were talking about manufacturing and not so much
• 22:02
  Speaker 1: of generation and generation only for captive requirements is because
• 22:06
  Speaker 1: generation means tremendous government overlays whether it's a central government,
• 22:13
  Speaker 1: whether it's a state government, remember power is a concurrent subject.
• 22:16
  Speaker 1: So state, as I say, the center also has a
• 22:18
  Speaker 1: say and often we've seen the state and the center
• 22:21
  Speaker 1: has been at loggerheads. Dis comes a key buyer of
• 22:25
  Speaker 1: power from this generation companies are all bankrupt. So why
• 22:30
  Speaker 1: get into PPS which could potentially get reneged, Why get
• 22:34
  Speaker 1: into this tussle of free power and the politics involved
• 22:37
  Speaker 1: around power inst
• 22:39
  Speaker 1: said focus on manufacturing because that was also coinciding with
• 22:43
  Speaker 1: the manufacturing push that the prime minister modi's government was
• 22:48
  Speaker 1: actually catalyzing. So the difference fundamental difference is not so
• 22:53
  Speaker 1: much generation, but more manufacturing and at the same time
• 22:59
  Speaker 1: as I said, it's not shying away from a generation
• 23:02
  Speaker 1: 20 gigawatts it is still generating.
• 23:05
  Speaker 1: That's a huge amount of solar power generation. But as
• 23:09
  Speaker 1: of now all that they're saying is it's only for
• 23:13
  Speaker 1: their own needs at Jamnagar which is the mega refinery
• 23:16
  Speaker 1: and for the mega or the giga factories very well.
• 23:20
  Speaker 1: But do you think it lacks expertise because I mean
• 23:25
  Speaker 1: a real spreading itself too thin with solar green hydrogen
• 23:28
  Speaker 1: battery biology and now offshore wind as well. Yes, that indeed,
• 23:33
  Speaker 1: if you ask me is a challenge, although nobody can
• 23:37
  Speaker 1: doubt reliance's ability to execute mega complex projects. But still
• 23:43
  Speaker 1: this is virgin territory also because the technologies involved at
• 23:48
  Speaker 1: the back end to make it all work, they are
• 23:51
  Speaker 1: fast changing. So unlike telecom where it had some experience
• 23:56
  Speaker 1: in the past, this is more like they followed something
• 23:59
  Speaker 1: very similar to retail which is you build
• 24:03
  Speaker 1: but you also by its taking divergent bets cutting across
• 24:08
  Speaker 1: technologies buying and investing in companies with competing technologies. So
• 24:12
  Speaker 1: it's investing in lithium companies which are into lithium ion batteries.
• 24:16
  Speaker 1: It's also investing in companies like for alien which is
• 24:20
  Speaker 1: into sodium cell, sodium and lithium, they compete. So it's
• 24:24
  Speaker 1: more like a venture capital play, you spray and you
• 24:28
  Speaker 1: pray multiple punts but if one clicks
• 24:31
  Speaker 1: it's bonanza. So talking of batteries or that you've already
• 24:35
  Speaker 1: touched upon that. But I wanted to ask you of
• 24:38
  Speaker 1: all the technologies and battery that Ariel is backing which
• 24:41
  Speaker 1: one do you think is the most exciting and why?
• 24:44
  Speaker 1: Well to me the most exciting is sodium. So the
• 24:47
  Speaker 1: reliance is expecting to start production of battery packs from
• 24:51
  Speaker 1: next year onwards. Now, why sodium so exciting? lithium iron
• 24:57
  Speaker 1: battery is ubiquitous.
• 24:59
  Speaker 1: An omnipresent. It's from smartphones to Tesla's cars. lithium iron
• 25:06
  Speaker 1: batteries are everywhere. So here is mixed. Ambani, one of
• 25:11
  Speaker 1: the richest man in the world who made a small
• 25:14
  Speaker 1: bet 136 million to back a startup from Oxford UK.
• 25:20
  Speaker 1: That is working with the humble sodium sodium say no Magnante.
• 25:27
  Speaker 1: It's the basic chemistry behind salt. So it's it can't
• 25:31
  Speaker 1: get more basic than that. Now, why do I say
• 25:35
  Speaker 1: it's more interesting is because for one thing sodium is
• 25:40
  Speaker 1: abundantly available. I was reading in a Bernstein research that
• 25:45
  Speaker 1: the earth's crust has 300 times more sodium than lithium. Now,
• 25:52
  Speaker 1: the global adoption rate of electric vehicles is currently so
• 25:57
  Speaker 1: high and it's so fast that it's not just lithium,
• 26:01
  Speaker 1: but high grade nickel cobalt, practically anything that goes into
• 26:06
  Speaker 1: the E V battery ecosystem is getting scarce. So the
• 26:09
  Speaker 1: first time ever battery packs are more expensive in 2022.
• 26:17
  Speaker 1: So coming back to sodium, it make
• 26:19
  Speaker 1: sense to back a technology that's as cheap as a
• 26:23
  Speaker 1: traditional lead acid batteries and requires ingredients that are so
• 26:28
  Speaker 1: easily available easy to source to put it simply Mr
• 26:31
  Speaker 1: Ambani is not getting into a space whether chinese are
• 26:36
  Speaker 1: already up, he's getting into a relatively newer play where
• 26:42
  Speaker 1: the chinese
• 26:44
  Speaker 1: have not yet mastered or cracked the formula and there
• 26:47
  Speaker 1: are no other serious deep pocket players anywhere in the world,
• 26:52
  Speaker 1: including in India. This is why sodium is strategic and
• 26:58
  Speaker 1: this is why sodium is to me the most exciting
• 27:02
  Speaker 1: story
• 27:04
  Speaker 1: as aliens aims to grow. Ambani and his team is
• 27:07
  Speaker 1: leaving no stone unturned in, grooming daughter isha and two
• 27:10
  Speaker 1: sons akash AnAnd. And even as the three learned the ropes,
• 27:14
  Speaker 1: the company and the family are set to be putting
• 27:17
  Speaker 1: in place a limited liability partnership structure considered an efficient
• 27:21
  Speaker 1: way of succession planning, tax planning and wealth preservation
• 27:26
  Speaker 1: orgy. For the first time, Mr Ambani officially indicated what
• 27:30
  Speaker 1: the rules for next year will be at reliance. How
• 27:32
  Speaker 1: do you read that?
• 27:34
  Speaker 1: Well, there was a lot of speculation that this time
• 27:37
  Speaker 1: not only really spell out the succession plan, but he
• 27:40
  Speaker 1: will also give enough indication of a demerger. I would
• 27:44
  Speaker 1: say they were in both cases, there were enough and
• 27:47
  Speaker 1: more hints, but the dice was already rolled way back
• 27:52
  Speaker 1: in june. You know, if you remember end june Mukesh
• 27:55
  Speaker 1: Ambani actually stepped down from the board of reliance infocom LTD,
• 28:01
  Speaker 1: which is the group's telecom arm to make way for
• 28:04
  Speaker 1: his son akash right to take over as chairman. So
• 28:08
  Speaker 1: that to me was the first chapter now this time around,
• 28:13
  Speaker 1: he's clearly said, akash was the first amongst equal, very
• 28:18
  Speaker 1: carefully worded speech. He was very, very clearly there. They
• 28:22
  Speaker 1: are the first amongst equal because reliance is also trying
• 28:26
  Speaker 1: to portray itself as a professionally run company. Daughter, IsHA
• 28:30
  Speaker 1: more the super boss of retail and youngest of them all,
• 28:36
  Speaker 1: Ananth to spearhead the new energy business. The old legacy
• 28:41
  Speaker 1: oil to chemical business basically now runs on autopilot Ananth
• 28:45
  Speaker 1: already overseas. That new energy will be the additional one.
• 28:49
  Speaker 1: But he didn't go all out to, you know, give
• 28:52
  Speaker 1: the brass tacks or go granular
• 28:55
  Speaker 1: and it's unlikely that Isha Ambani is going to take
• 29:00
  Speaker 1: over as the chairman immediately. Probably, maybe towards the end
• 29:06
  Speaker 1: of this fiscal ISHA definitely will get straight into the
• 29:10
  Speaker 1: holding company of retail because retails corporate structure is similar
• 29:15
  Speaker 1: to that of telecom since october 2014, akash and IsHA
• 29:20
  Speaker 1: are formally given the business roles, but
• 29:25
  Speaker 1: there is no Ambani family member on the board of
• 29:29
  Speaker 1: the operating retail company. I'm not saying this. R. O. C.
• 29:33
  Speaker 1: Data says this and that is unlikely to change in
• 29:36
  Speaker 1: the future as well. There are people who are close
• 29:39
  Speaker 1: aides of Mr Ambani, Mr Subramaniam Venkata Callum
• 29:43
  Speaker 1: who's the M. D. The MD of reliance, retail ventures
• 29:47
  Speaker 1: doubles up as the whole time Director of reliance retail limited.
• 29:51
  Speaker 1: Now it's unlikely that Isha Ambani will become the boss
• 29:56
  Speaker 1: of the operating company. Why? Because according to reliance is
• 30:02
  Speaker 1: officials and people we spoke to. They feel retail is
• 30:06
  Speaker 1: a more sensitive, politically sensitive.
• 30:09
  Speaker 1: There could be lawsuits, there could be several other issues
• 30:13
  Speaker 1: so they want to keep the family insulated. So as
• 30:17
  Speaker 1: per the companies act, one cannot become the chairperson of
• 30:21
  Speaker 1: a company without first being a director of the company
• 30:25
  Speaker 1: and shareholders decided their board of directors and the board
• 30:29
  Speaker 1: of directors in turn decide the chairman of the board.
• 30:32
  Speaker 1: So what that means you have to become a member
• 30:35
  Speaker 1: of the board first to become a chairman. So that
• 30:39
  Speaker 1: means IsHA is unlikely to become a chairperson of reliance
• 30:44
  Speaker 1: retail limited, which is the operating company instead. Over the
• 30:47
  Speaker 1: next few years, you will see both Akash and Isha
• 30:50
  Speaker 1: getting elevated straight as chairpersons of the telecom and the
• 30:55
  Speaker 1: retail holding companies simultaneously. While Mukesh Ambani takes a more
• 31:00
  Speaker 1: strategic role, he's still learning on the job and that's
• 31:05
  Speaker 1: something that Mr Ambani also said in his speech Oil
• 31:08
  Speaker 1: and Gas has always been his forte, his passion. He
• 31:11
  Speaker 1: spends half the time in Jamnagar. So naturally as a corollary,
• 31:16
  Speaker 1: he is also getting involved in the new energy because
• 31:20
  Speaker 1: that's an extension of the legacy business.
• 31:25
  Speaker 1: It is said that when Mr Ambani inherited the oil
• 31:28
  Speaker 1: and gas business from his father over two decades ago,
• 31:31
  Speaker 1: the blueprint of the expansion into retail and telecom were
• 31:34
  Speaker 1: already laid out and as India's most valued company charts
• 31:38
  Speaker 1: out the next course, Ambani isn't retiring yet. He has
• 31:43
  Speaker 1: been emphasizing on his vision for the internationalization of reliance
• 31:47
  Speaker 1: possibly why reliance has been making bids for overseas deals
• 31:51
  Speaker 1: like it recently did for the british chemist chain boots.
• 31:55
  Speaker 1: And of course not to forget his call for top
• 31:58
  Speaker 1: notch talent from India and around the world at the
• 32:00
  Speaker 1: A G M on monday.
• 32:03
  Speaker 1: It however, remains to be seen. How far will reliance
• 32:06
  Speaker 1: go with jen next at the help
• 32:09
  Speaker 1: you were listening to reliance A GM 2022. The morning
• 32:12
  Speaker 1: brief takeaways with me called
• 32:15
  Speaker 1: Thank you banker Kalyan and orgy for your insights. Producers
• 32:19
  Speaker 1: for this episode are Sarabi modi and Anu Priya bahadur,
• 32:23
  Speaker 1: sound editor Andrew Neil Bhattacharjee.
• 32:26
  Speaker 1: Executive producers are an Oprea bahadur and origin barman. If
• 32:30
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• 32:34
  Speaker 1: Morning brief is every Tuesday thursday and friday
• 32:38
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• 32:44
  Speaker 1: tuning in.