Mukesh fails to enthuse investors

MUMBAI: Even after promises by Reliance Industries (RIL) chairman Mukesh Ambani at its 37th AGM to dole out chocolates and ice-creams to shareholders next year, RIL shares slipped as investors failed to get clarity on the falling production from the Krishna Godavari (KG) basin. Shares of India's most valued firm, after opening on a positive note, lost momentum and fell by 1.65% to Rs 936 as Ambani was unable to clarify shareholders' doubts on un-deployed surplus cash and details of new businesses.

Ambani assured his shareholders that RIL will be a debt-free company by March 31 next year, using cash earned from selling its stake in oil and gas fields to UK's BP Plc. He also said that RIL would consolidate its global leadership position in its core businesses of plastic, refining and petrochemicals, and focus on consumer facing business like retail and broadband foray.

Although the RIL chairman was silent on specific details for the future course of action of RIL's entry into financial services and telecom, he said a partnership-led transformation would be on the top of the agenda going forward. All he would say was that it was conceptualizing a foray into broadband wireless services.

"With a cash balance of Rs 42,393 crore, our company is in a very strong position financially. Reliance will be completely debt free, net of cash balances within this year," Ambani told shareholders here on Friday in what is seen as one of the most eagerly awaited AGMs in corporate India.

The company plans to invest aggressively in retail business by launching cash-and-carry, or wholesale outlets, he said. "We are positioning Reliance Retail to be an undisputed leader in organized retailing. We plan to create similar value in the retail business as we have been doing historically in the core businesses." Ambani, however, ruled out the possibility of getting into the banking space or listing any of the RIL subsidiaries, when asked specifically by shareholders.

Like every year, there was the usual sprinkling of humour, advice and adulation for the billionaire businessman. While some wanted the RIL chairman's wife, Neeta Ambani, to be brought on the board, some others wanted him to support Baba Ramdev in his crusade against corruption. There were still others who expected a dividend on his father's birthday and also wanted him to meet shareholders the way his father used to. Ambani assured he would meet a few on Monday. Ambani was accompanied by his mother, Kokilaben, his wife Neeta Ambani and his children Isha, Akash and Anant.

Some were disappointed as well. "Mukeshbhai's speech sounded like a general statement and had nothing new to offer. Most of it is already in the public domain. I wanted to know the details about RIL's financial services and broadband foray," said a disappointed shareholder, owning 120 RIL shares.