Reliance should not keep the stock market waiting too long

The flagship of Asia’s richest tycoon is looking a tad overburdened with businesses that are mature enough to be cast off on their own.

- ANDY MUKHERJEE

Successful public floats of telecom and retail units will do more than make Mukesh Ambani a centi-billionaire—they may well determine the hold of the family-run conglomerate on India’s broader economy when control passes to the next generation.

That transition could arrive by 2028. At Reliance’s annual general meeting on Monday, the 66-year-old announced that his three children would be joining the board, even as he continues as chairman and managing director for five more years. Reliance’s sway has grown following a $150 billion investment spree over the past decade. It now controls 15% of the total fixed capital deployed at India’s top 300 non-financial firms, employs 7% of the workforce and garners 10% of their combined ebitda. Reliance is no longer just a corporate, but “a precious Indian institution," Ambani said. The market, however, wants to see some of that translate into a higher share price. After spinning off its consumer-finance venture worth $16 billion, the enterprise is valued at $232 billion, including net debt. Macquarie analysts downgraded the stock to ‘underperform’ last month. A premium for retail and telecom may already be embedded in the share price, and investors may be assessing new energy—its next big bet—at around $20 billion, they wrote.