In the lead-up to the highly anticipated Reliance Industries Annual General Meeting (AGM) for 2024, shareholders of the oil-to-telecom giant were greeted with two significant pieces of news that positively impacted the company’s share price. First, the Competition Commission of India (CCI) approved the merger of Disney+ Hotstar with JioCinema, a strategic move aimed at strengthening Reliance’s foothold in the digital entertainment space. Second, the company announced a proposed 1:1 bonus issue to be considered in a board meeting scheduled for September 5, 2024. These announcements underscored Reliance’s commitment to rewarding its shareholders while pursuing aggressive growth.
Reliance’s Bonus Issue: A Historic Move to Boost Shareholder Value
The announcement of a potential 1:1 bonus share issue marks the first time since 2017 that Reliance Industries Limited (RIL) has proposed such a reward for its shareholders. In the 47th AGM, Chairman Mukesh Ambani emphasized the company’s philosophy of aligning growth with shareholder rewards. “When Reliance grows, we reward our shareholders handsomely. And when our shareholders are rewarded handsomely, Reliance grows faster and creates more value,” Ambani remarked during his address to shareholders.
The proposed bonus issue is set to be discussed by the board of directors on September 5, 2024. This move is expected to enhance liquidity in the stock market, making it more attractive to investors by effectively doubling the number of shares in circulation without altering the market capitalization of the company. The last time RIL issued a bonus share was in 2017, also in a 1:1 ratio, a decision that was well-received by investors and analysts alike.
Impact on Reliance Share Price
Following the announcement of the bonus issue, Reliance Industries’ share price saw a notable surge. Intraday trading on Thursday witnessed the share price rising by up to 2.63%, reaching Rs 3,074.80 per share. By the end of the trading day, the share price settled at Rs 3,044.75, reflecting a 1.64% increase on the Bombay Stock Exchange (BSE). In comparison, the BSE Sensex closed 0.43% higher at 82,134 points, showcasing the heightened investor interest and confidence in Reliance’s strategic moves.
Other Key Announcements at Reliance AGM 2024
In addition to the bonus issue, the 47th AGM was a platform for unveiling several other significant initiatives aimed at bolstering Reliance’s future growth and technological leadership:
- Investment in Research and Development (R&D): Mukesh Ambani highlighted the company’s commitment to innovation by announcing an investment of over Rs 3,643 crores in the financial year 2024 (FY24) for R&D activities. Cumulatively, Reliance has invested Rs 11,000 crores in research over the past four years, underlining its focus on cutting-edge technology and sustainable practices.
- Introduction of Jio Brain: Ambani announced the development of Jio Brain, a comprehensive suite of tools and platforms designed to cover the entire AI lifecycle. This initiative aims to accelerate the adoption of artificial intelligence across Reliance’s various business segments, including Jio and other enterprises under the conglomerate. The objective is to leverage AI to drive advancements in critical sectors such as agriculture, education, healthcare, and small businesses, positioning Reliance as a global leader in AI technology.
- Jio AI Cloud and Free Storage Offer: In a move to further strengthen its digital ecosystem, Reliance Jio plans to introduce a Jio AI Cloud service, offering up to 100 GB of free cloud storage. This offer, expected to be rolled out around Diwali, aims to attract new customers and provide existing users with enhanced digital services. The introduction of the Jio AI Cloud is part of Reliance’s broader strategy to integrate advanced technology solutions into everyday business and personal use.
Reliance’s Legacy of Rewarding Shareholders
Mukesh Ambani reiterated his belief in rewarding shareholders, stating, “When Reliance grows, it rewards its shareholders.” Over the years, Reliance has consistently prioritized shareholder returns through dividend payouts and bonus issues. The company first issued a 1:1 bonus share in November 2009, followed by a similar bonus issue in September 2017. These actions have contributed to building investor trust and confidence in the company’s long-term growth trajectory.
Outlook for Reliance Shareholders
The recent developments and announcements at the 47th AGM underscore Reliance Industries’ proactive approach to scaling its business while ensuring shareholder value is maximized. The proposed bonus issue, coupled with strategic initiatives in digital entertainment, AI, and cloud services, reflects Reliance’s vision to remain at the forefront of innovation and market leadership.
With the AGM providing a glimpse into Reliance’s ambitious plans, investors remain optimistic about the company’s future prospects. As Reliance continues to expand its portfolio and enhance its technological capabilities, the share price is likely to reflect these positive sentiments, positioning the conglomerate for sustained growth in the years to come.