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Reliance Industries, India's most valued company, is poised for significant growth and shareholder rewards. The company's chairman, Mukesh Ambani, announced a 1:1 bonus share issuance, marking the sixth such event since the company's listing in 1977. This move comes as RIL celebrates its robust financial performance and aggressive expansion plans for its diverse business portfolio.
The bonus share issuance, to be considered at the company's September 5th board meeting, aims to reward shareholders, capitalizing on RIL's impressive financial performance. In FY24, the company achieved a record net profit of Rs 79,020 crore, demonstrating its financial strength and growth potential. This bonus share offering, however, will not alter the investment value of the stock as the share price will adjust accordingly. The primary impact will be an increase in stock liquidity.
Ambani outlined RIL's ambitious plans for the future, stating that the company is on track to more than double in size by the end of this decade. This expansion strategy includes significant growth across its various business segments. The company's digital services arm, Jio, and its retail units are projected to double their revenues and operating profits within the next 3-4 years. Notably, RIL's new energy business, consisting of solar photovoltaic and fuel cell manufacturing, energy storage, and green hydrogen production, is poised to become a substantial and profitable enterprise within the next 5-7 years.
Ambani highlighted RIL's commitment to sustainable growth, emphasizing the role of green fuels and AI-based solutions as long-term growth engines. The company is developing a comprehensive suite of AI tools and platforms called Jio Brain, while establishing AI-ready data centers in Jamnagar, Gujarat, powered by green energy. Ambani underscored the company's commitment to creating the world's lowest AI inferencing cost in India, making AI applications accessible to a wider audience.
Beyond its digital and new energy ambitions, RIL's oil-to-chemicals (O2C) business remains a significant revenue and profit generator. Although Ambani did not provide specific details on potential listing of Jio and the retail units during the AGM, these strategic business segments are expected to play a crucial role in RIL's future growth trajectory. The company's focus on innovation, technology, and sustainable practices positions it for continued success in the global market.