The move comes as RIL seeks to reward its shareholders amid robust financial performance and aggressive growth plans for its diversified businesses.In FY24, RIL posted a record net profit of Rs 79,020 crore. “When Reliance grows, we reward our shareholders handsomely. And when our shareholders are rewarded handsomely, Reliance grows faster and creates more value,” said Ambani at the company’s 47th post-IPO annual general meeting.
In a bonus share offering, a company issues free shares to its existing shareholders by capitalising on its reserves. The corporate action doesn’t lead to any change in the investment value of the stock as the share price gets adjusted accordingly. However, this will boost the stock’s liquidity. After the bonus share issuance, RIL’s share capital will double to Rs 13,532 crore from the current base of Rs 6,766 crore.
Size To Double:
Ambani said RIL is on track to more than double in size before the end of this decade, cementing its position as one of the most valuable companies in the world. In FY24, it had a revenue of Rs 10 lakh crore ($120 billion). The company’s digital services (Jio) and retail units will double their revenues and operating profits in the next 3-4 years, while the new energy business- “the new jewel in RIL’s crown” will become big and profitable as its oil-to-chemicals (O2C) business over the next 5-7 years, the chairman said. The new energy business consists of solar photovoltaic and fuel cell manufacturing, energy storage and green hydrogen production. Currently, O2C is the largest contributor to RIL’s revenue and operating profit. Ambani, however, didn’t touch on the potential listing of Jio and the retail units at the AGM.
Expansion Moves:
Jio is developing a comprehensive suite of artificial intelligence (AI) tools and platforms called Jio Brain and is establishing AI-ready data centers in Jamnagar, Gujarat, which will run on green energy.”Our goal is to create the world’s lowest AI inferencing cost in India. This will make AI applications more affordable than anywhere else,” Ambani said.
By the end of this year, RIL will commence the production of solar photo-voltaic modules and will complete the first phase of integrated solar production facilities in the following quarters, Ambani said. “Green fuels and AI-based solutions will become long-term growth engines for Reliance,” Ambani said.