Though the year 2020 has been a forgettable one for many, it was surely an unforgettable one for Mukesh Ambani. The energy-to-telecom-to-digital conglomerate Reliance Industries Ltd (RIL) became India’s first and the only company to cross a market capitalisation of Rs 15 lakh crore as investors rejoiced at fundraising that eventually helped the company in becoming totally debt-free. RIL is also marked for Asia’s 10th largest firm by market capital.
If there is one undeniable fact about the Reliance Industries’ success story, it has to be the company’s ability of dreaming and delivering at scale. RIL is India’s most profitable company and the largest contributor to India’s GDP, exports and taxation alone. Not only this, it owns India’s leading telecom company Reliance Jio and Reliance Retail, which has grown to become India’s largest retailer since its inception in 2006. Adding to the list, RIL is India’s largest producer of petrochemicals and polyester business and is the number one company in market capitalisation.
The company’s journey began in 1977 with Rs 50 crore investment and about 60,000 shareholders. Today, it has effectively given shape to the equity cult in India and the company has 31 lakh shareholders.
Talking about its biggest wins in 2020 – Jio Platforms and Reliance Retail have been in the lime light for quite sometime now. Even as the world came to a literal standstill due to the coronavirus pandemic, India’s most valued publicly listed corporation managed to grow, prosper and expand. The first quarter of 2020 wasn’t bloomy as RIL stocks plummeted 39 percent from January to March due to a steep fall in global crude prices and subsequent stock market crashes. It wiped off $21 billion from RIL Chairman Mukesh Ambani’s net worth, and he also lost the tag of ‘Asia’s richest person’ to Alibaba’s Jack Ma. Then came the overnight lockdown in March, which led to a stoppage in industrial activity.
Towards the end of April, RIL’s digital arm ‘Jio’ Platforms launched a continuous fundraising that was never seen before. Over three months, Jio went on to raise a mammoth Rs 1.52 lakh crore in FDI from 13 investors, diluting 33 percent equity to achieve the goal of net debt-free. The serial fundraise also helped Mukesh Ambani return to his position of Asia’s richest person, and eventually, break into the world’s top-five billionaires’ club as his fortune grew to $80.2 billion in August.
While first half of 2020 was dominated by Jio, RIL turned its attention towards its retail division in the second half. A similar continuous fundraise was launched at Reliance Retail too and a majority of Jio’s investors were a part of it. With this, who would stop it from becoming India’s largest retail operator in the year! By November, Reliance Retail managed diluting 10.09 percent equity with Rs 47,265 crore fundraise from top strategic and financial investors. It also went on to acquire a bunch of companies and startups during the year. Earlier, in September, RIL’s market cap crossed $200 billion (about Rs 14.48 lakh crore), making it the first Indian company to breach the mark. Ranked 48th, it also broke into the world’s top 50 most-valued companies. Now, Reliance is Asia’s 10th most valued firm in terms of market cap.
Even in the tough times of Covid19 and lockdown, in April 2020, the social media giant Facebook made a whopping investment of $5.7 billion in Reliance Jio to get a stake of 9.99% in the former. What followed was a long list of investors like Intel, Silver Lake, Vista who started following the footsteps of Jio. The company raised Rs 1.78 lakh crore by selling just over 25 percent stake and undertaking a Rs 53,000 crore rights issue – the largest by any company in India. The uninterrupted 12-week investment spree is the largest continuous fundraise by any company in the world.
The company had also made big moves into the retail space with the launch of “JioMart” in 200 locations. JioMart is RIL’s Online-to-Offline(O2O) commerce platform. It is set up with the aim of digitising tens of millions of grocery stores and small merchants across India. Its service is already averaging half a million orders per day.
It was in June when RIL became the first Indian firm to hit Rs 15 lakh crore market cap and also became debt-free after it managed to raise Rs 1,68,818 crore in just 58 days. At last count, Jio Platforms had raised Rs 1,15,693 crore through 11 back-to-back deals within a span of eight weeks and the flagship Reliance Group itself raised Rs 53,124.20 crore via India’s biggest rights issue ever.
In August, RIL created a $26 billion retail empire after the acquisition of the debt-ridden Future Group for Rs 24,713 crore. The Kishore Biyani-owned company had been the pioneer of modern retail in the country. While many mourned about the gradual decline of the iconic business journey, the purchase gave Reliance Retail access to 1,800 Future Group stores across 420 cities and took hold of popular retail formats such as Big Bazaar, fbb, Foodhall, Easyday, Nilgiris, Central and Brand Factory. The biggest impact of the deal was expected to be felt in the food and grocery segment, which accounts for over 65 percent of Indian retail. Prior to the Future Group deal, Reliance Retail also acquired a majority stake in online pharmacy Netmeds for a cash consideration of Rs 620 crore.
RIL’s acquisition spree didn’t end here! In November, the company shocked India’s startup universe by acquiring furniture retailer Urban Ladder for Rs 182 crore in a fire sale. The Sequoia Capital-backed startup had been valued at Rs 1,200 crore in 2018, and Rs 750 crore in 2019. Urban Ladder’s sharply declining valuation confirmed the perils of the online furniture business, which accounts for just three percent of India’s overall furniture market.
Sir Richard Branson rightly said, “Business opportunities are like buses, there’s always another one coming.” This quote aptly sums up the year that was for Reliance Industries. Nearly 20 years after Reliance Industries first got into the telecom business; it has always emerged at the top!