A ”virtual merger” with his elder brother and his son’s good luck are among the things that Reliance Group chairman Anil Ambani is banking on for his business.
On Sept. 27, Ambani spoke at the annual general meetings (AGMs) of four of his group companies—Reliance Communications (RCom), Reliance Capital, Reliance Infrastructure and Reliance Power—and shared fresh updates about the group’s businesses with shareholders.
India’s 32nd richest man said working with his elder brother (and India’s richest man) Mukesh Ambani’s Reliance Jio was aiding his telecom venture RCom. He also said that RCom is looking to pare its losses by 75% in the next one year and that his son Jai Anmol Ambani was bringing “tremendous luck” to the group.
Below are the highlights of his speeches:
Ambani, who parted ways with his elder around a decade ago, said the duo have come together again for the launch of the latter’s telecom venture Reliance Jio. In 2005, the billionaire brothers had split by carving up Reliance Group, built by their father Dhirubhai Ambani. This was one of the most high-profile business divisions in India Inc.
But in January this year, the two brothers entered into an agreement where Mukesh Ambani’s Jio would buy spectrum from Anil Ambani’s RCom across nine circles. Now, the two companies are sharing telecom infrastructure including spectrum, network, towers, and fiber, Anil Ambani said while addressing RCom shareholders during the AGM.
He called this arrangement a “virtual merger.”
“There are two committed brothers, Mukesh Ambani and Anil Ambani, both working relentlessly to fulfill Dhirubhai Ambani’s telecom dream for India,” he said during RCom AGM. “What we have accomplished is a virtual merger between RCom and RJio (Reliance Jio).”
RCom, the most leveraged among the listed Indian telecom companies, aims to cut its debt by 75% in the next one year, Ambani said.
The company currently has a debt of Rs42,650 crore ($6.4 billion), which has weighed on RCom’s stock, bringing it down nearly 95% since its high in 2008.
Among other things, the company’s deal with Reliance Jio will help it pare costs, he added.
RCom, which has been looking to sell its mobile tower business for many years now, may sign a deal for the same by October, Ambani said. The cash from this deal could help the company settle some of its debt. RCom’s debt is also expected to go down by Rs20,000 crore after completion of the ongoing merger of its wireless business with rival Aircel, as the Reliance Group company will transfer a part of its debt to the new entity formed out of this merger.
On Sept. 14, RCom announced its plan to merge its wireless business with smaller rival Aircel, to create India’s third-biggest cellular carrier with around 180 million subscribers. RCom and Aircel will each hold an equal stake in the merged entity.
The merged entity will be among the top wireless operators in 12 circles in India, Ambani said at RCom AGM on Tuesday. With this deal, RCom has enough spectrum and it won’t need to depend on the fresh auction that starts this week, he added.
Ambani introduced his son Jai Anmol to the shareholders of Reliance Capital and said the 24-year-old had brought “tremendous luck” to the financial services company since he joined as a director on its board in August this year.
The shares of Reliance Capital have surged 40% since Anmol came on board, Ambani said.
“I hope and I am confident that the Anmol effect will continue,” Ambani said while addressing Reliance Capital’s shareholders. He added that his son is a “part of this younger demography and will relate to the future customers, shareholders, employees as well as the other stakeholders of Reliance Capital.”
A graduate of UK’s Warwick Business School, Anmol has been training at Reliance Capital for the last two years.