Billionaire Ambani Expects to List Financial Services Unit Soon

(Bloomberg) -- Reliance Industries Ltd. said it expects shares of its financial services business to be listed soon as the conglomerate seeks to propel its recently carved out unit into India’s largest non-banking lender, leveraging the prowess of the digital and retail businesses.

“The new entity is expected to unlock value for shareholders and give them an opportunity to be a part of a new growth platform,” Reliance’s billionaire chairman Mukesh Ambani in his message to shareholders in the annual report for the financial year that ended Mar. 31.

Reliance will hold its annual shareholders’ meeting on Aug. 28.

Ambani, following the legacy of his late father Dhirajlal Hirachand Ambani, has used the annual investors’ gathering to announce big-bang projects and future growth plans. In the past, he has offered free shares and launched a new smartphone at effectively zero cost to users. 

This year, analysts are keen to know more about the billionaire’s strategy for his new unit Jio Financial Services Ltd., clean energy and digital businesses. Reliance Strategic Industries Ltd., which will be later renamed as Jio Financial, has been valued at about $20 billion after its shares were spun off last month through a special session conducted by exchanges to discover its trading value.

The newly formed firm, which little revenue as of now but owns 6.1% stake in Reliance Industries, has already announced partnership with BlackRock to set up an Indian asset management venture. “Jio Financial Services aims to provide simple, affordable and innovative digital first solutions,” according to Ambani, Asia’s richest man.

The tycoon has a track record of transforming businesses and has helped the conglomerate to become a consumer services behemoth in the last decade from its earlier focus on traditional crude oil refining and petrochemicals businesses.

Reliance is also seeking to make Jio Financial Services one of India’s top non-banking finance companies to bolster its presence and creating an empire that’s similar to Alibaba Group Holding Ltd. and Tencent Holdings Ltd. 

Other key points from Ambani’s note to investors in the annual report:

• Reliance will look for the right opportunity to raise capital to support growth plans of its existing as well new businesses while maintaining a keen focus on financial discipline and risk management.
• Polymer, a key product from its oil-to-chemicals business, is expected to witness strong demand, driven mainly by growth in e-commerce, packaging, durables, automobile and infrastructure segments including pipe makers.
• Reliance expects global oil demand will remain healthy on the back of steady economic growth, while new fuel supply from upcoming refining capacities in Middle East, China and Africa will likely keep the market balanced.
• The company said its first ever green hydrogen production was achieved with firing of torrefied biomass in gasifiers during the year ended March. It has already announced plan to set up 20 GW solar capacity for captive needs and said it expects to start transition from gray to green hydrogen in 2025.
• Reliance undertaking exploration efforts to augment its gas reserves; peak production from its current deepwater fields will contribute about 30% of India’s domestic output

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