Ambani Cashes In

The market rewarded Reliance Industries for bringing in partners and deleveraging

- Samar Srivastava

In 2020, Mukesh Ambani aggressively monetised his stakes in the telecom and retail ventures that he’d spent much of the last decade building. The flurry of deal-making, which started in April, catapulted the Reliance Industries stock to an all-time high, taking Ambani’s net wealth to $88.7 billion, up by $37.3 billion in the last year. He is No 1 on the Forbes India Rich List for the 13th year (page 56).

Asia’s richest man has positioned his flagship Reliance Industries [owner of Network 18, the publisher of Forbes India] to be a major beneficiary of the consolidation playing out in telecom and retail. Both these consumer businesses have long growth runways ahead. In telecom, there is the opportunity to take prices up and cross-sell retail services while Reliance Retail has now reached the critical mass needed to take on consumer companies and negotiate better prices and pass them on to consumers.

It was the Facebook deal on April 22 that alerted the market to the potential in Jio’s customer base. It's 405 million users who paid an average of ₹145 a month for its services were now a sizeable base for a global technology company to be interested in. Facebook, which had been trying unsuccessfully to roll out its payments platform in India, had decided instead to partner with Jio, thereby lessening the competitive intensity. The company paid ₹43,574crore for a 9.9 percent stake in Jio Platforms and signaled that it would work to integrate WhatsApp with Reliance Retail’s ordering platform—a potential game-changer as the messaging platform has 400 million users across India.